Rate parity is the dominating factor affecting hotels’ distribution and revenue strategies, says a new study by Ecole Hôtelière de Lausanne and Rate Tiger.
The Distribution Challenge 2012, a multi-regional study conducted across five countries, found that revenue managers are using channel management tools and price shopping reports up to 11 times a day in order to drive revenue on their main channels.
Maintaining price consistency is a struggle, however, and now they are seeking new ways to improve exposure, reach new markets and increase direct bookings.
Senior lecturer of revenue management at Ecole Hôtelière de Lausanne, Horatiu Tudori, said: “Retail sites are continuously monitoring rate parity, placing a lot of pressure on hotels to update rates on their channels.
“Hoteliers are spending more time managing rate parity and ensuring rate integrity, which is taking them away from defining more sophisticated strategies to reduce the cost of distribution and increase the RevPAR.”
The six-month study found that the top three focuses of revenue managers are increasing RevPAR, controlling cost of distribution/e-business and increasing exposure.
“The hotels defined the strategies they put in place for 2012 as being the need for RevPAR improvement to be achieved by higher rates and average daily rates (ADR), or by increasing length of stay (LOS).” continued Horatiu.
Hoteliers are being challenged, by rate parity and the influencing nature of online travel agencies (OTAs), to source new revenue and booking streams. The study found that hoteliers are focusing on direct sales by developing new corporate contracts, pushing own web sales, and maintaining faster availability and rates on non-conventional distribution channels.
“OTAs are getting bigger and bigger and they have such a power that we cannot fight against them, so we are trying to find some other ways of communicating our offering and being exposed on the web. Of course we need to be present and we need to have some availability and rate parity with the OTAs,” added one of the research respondents.