Today's Revenue Management thought:-

Keep it simple & don’t confuse your customer…….

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Do your homework, before signing up……

Do OTA loyalty programmes lead to rate disparity ?

OTA (Online Travel Agency) loyalty programs can potentially lead to rate disparity.

Here's how:

OTA loyalty programs typically offer their members exclusive discounts, cashback, or other incentives when they book through their platform. However, these discounts and incentives come at a cost to the hotels, which have to pay a commission fee to the OTA for every booking made through their platform.

To compensate for this cost, hotels may increase their rates on OTA platforms to offset the commission fee. This can lead to rate disparity between the hotel's website and OTA platforms, where the rates on the OTA platform may appear to be lower due to the discounts and incentives offered by the loyalty program.

Additionally, OTAs may use dynamic pricing strategies, where the rates for a particular hotel may change based on supply and demand, seasonality, and other factors. This can further exacerbate rate disparity and make it difficult for hotels to maintain rate parity across different channels.

In summary, while OTA loyalty programs can be beneficial for consumers, they may lead to rate disparity for hotels, which can impact their bottom line and create confusion for consumers trying to compare prices across different platforms.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Rate disparity - experiencing rate parity issues - identify the problem….

To address rate parity issues, it's important to identify the root cause and take appropriate steps to resolve the problem. This may involve implementing rate parity monitoring tools, revising pricing strategies, renegotiating contracts with distribution channels, or implementing technology solutions to prevent errors and discrepancies.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Is rate disparity advantageous for hotels ?

Not maintaining rate parity on your distribution channels can be a disadvantageous situation for the following reasons:

1. Reduced profitability: When different OTAs offer different rates, customers tend to book through the cheaper OTA, resulting in reduced revenue for the hotel. This, in turn, reduces the hotel's profitability.

2. Brand value erosion: If a customer sees that the same room is available at different prices on different OTAs, they may perceive the hotel as lacking consistency and integrity. This can lead to a reduction in the hotel's brand value.

3. Confusion among customers: When customers see different rates for the same room on different OTAs, they may become confused about which rate to choose. This can result in them not booking the room at all or choosing a competitor's hotel instead.

4. Difficulty in forecasting demand: When different OTAs offer different rates for the same room, it can be difficult for hotels to forecast demand accurately. This can lead to overbooking or underbooking, resulting in loss of revenue.

In summary, rate disparity is not advantageous for hotels because it reduces profitability, erodes brand value, confuses customers, and makes it difficult to forecast demand accurately.

It is in the interest of hotels to ensure rate parity across all distribution channels in order to maintain consistency and integrity in their pricing strategy.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Will the end of rate parity lead to a change in the distribution mix ?

The end of rate parity will potentially lead to a change in the distribution mix for hotels. Without rate parity restrictions, hotels have more freedom to offer different rates and promotions through various distribution channels, which could impact the mix of channels they choose to use.

Ultimately, the decision about the distribution mix will depend on a variety of factors, including the hotel's marketing and revenue strategies, its target customer segments, and the competitive landscape in the local market. It is important for hotels to carefully consider the benefits and drawbacks of different distribution channels and develop a distribution strategy that is tailored to their specific needs and goals.

However, it's worth noting that the impact of the end of rate parity on the distribution mix may not be immediate or significant for all hotels. Some hotels may choose to continue to offer consistent pricing across all channels, while others may decide to maintain their existing distribution mix. In the end, the key is for hotels to remain flexible and adaptable to changes in the market and consumer behavior, and to be strategic in their approach to distribution.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Thursday is the new Friday…….

I usually publish an inspirational image on Fridays. Tomorrow May5th is a public holiday in Denmark (Great Prayer Day), which our parliament recently abolished, so it’s being celebrated for the last time.

So Fridays inspirational image is being published today….. trying not to make things too complex.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Are hotels ready for the Post-Rate Parity Era on OTA's ?

Inspired by the decision from the EU on rate parity clauses by OTA’s, I thought it would be a good idea to write about & did a little research.

I discovered this article from 2015 by Max Starkov discussing the subject and find the content still relevant.

Before we all start celebrating, we must ensure that we fully understand the full impact and consequences of differentiated pricing. In addition we also need to ensure that we have invested in the technology that allows us to take full advantage of situation.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Use Booking Patterns to Shape Your Forecast.

By using booking patterns to shape a forecast, we can create more accurate projections and adjust budgets accordingly.

A more detailed analysis of booking patterns can help identify areas of opportunity to maximize profits and identify any potential risks that could affect your hotel’s performance. Utilising advanced analytics and reporting, we can better understand our booking patterns and use this data proactively.

So when we start rolling out next years budgets getting through the piles of work assessing the upcoming year’s goals, threats and opportunities , calculating a final prediction of revenues and expenses for each operational department becomes allot easier.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

May 1st - International Workers day…..

For some a holiday & for others a normal working day.

Have a profitable week.

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Today's Revenue Management thought:-

Many of us think that revenue management strategies are a new phenomenon.

Here’s a 1904 cartoon from The Tacoma Times warning attendees of the 1904 St. Louis World's Fair of the probability that St. Louis residents will gouge them.

The cartoonist depicts people renting "hotel rooms" that are literally shelves.

The bottom shelf is $1 (in 1904 money), the top shelf is $3, and the adjacent wall hooks are $0.50.

Have a profitable week.

✌🏼