Rate Parity - Evil or Not?

Rate Parity Battle Ensnares Sabre

For years the battle to bring rate parity to the hotel world has been a somewhat hit or miss affair. In the North American market where the market pays retail this is common behavior. In the rest of the world where retail is not the norm in pricing rate parity is both harder to achieve as well as much more complex.

Many people have attempted to bring this to a sense of rationality – but this has only been partially successful.

As the rate distributers and checkers get more and more sophisticated, those who commit to making rate parity work have tried to up their game. However is that good behavior for the consumer or bad?

In fact if the rate parity program starts to affect overall pricing, then it could be considered a way of raising and fixing the price. And it seems someone finally noticed

It all started with a pissing match between Skoosh .com and its larger brethren Sabre’s lastminute.com and Priceline’s Booking.com. In September – Skoosh up’ed its game by reporting both to the UK”s Office of Fair Trading, (OFT). BBC News http://www.bbc.co.uk/news/business-11330463

Much to the chagrin of the larger players – the Skoosh decided to put the matter to the extreme test. By filing a formal complaint with the OFT..

The OFT has formally started its investigation into the practice and has notified several of the players accordingly.

The end result could have a profound effect on the long term practice of rate parity maintenance. For those who make a living out of trying to monitor and enforce rate parity – you have now been officially warned that the practice will be under some pressure. Given the other rate practices that are under the microscope – such as hotel tax rates, the hotel industry needs to be careful not to upset the UK government. So better start thinking about how else you would like to ensure that your rates are correct across the board

Memo to OFT. Good luck with this topic. And if you would like some help to give me a call.

Cheers


With a tip of the hat to Hotel Internet Help who has a good story on the subject it can be found here:

http://www.hotelinternethelp.com/lang/en/revenue-management/the-price-of-rate-parity