|August 1, 2005 - As a hotelier over the last 5 years you have just
gone through the experience of 3rd party websites and distributors asking
you for the best rate, and now they are all of a sudden asking for rate
parity. You might ask yourself why.
Distributors of your rooms have got very large budgets for marketing, more then most hotel chains. They will spend this money in attracting consumers to their website, where after these investments convert into marketing for hotels. All these third party distributors are very aware of the fact that their consumers are always shopping around. The average consumer actually checks at least two websites before making a decision on where to book their hotel room. Naturally a consumer will go to the site where he will find the best rate for the hotel that heís shopping for. These 3rd party websites and distributors just do not want to waste money on their marketing efforts offering uncompetitive rates.
This is where your relationship with your providers comes in place. Keep in mind that with all the marketing money they are spending, they have thousands, often millions of unique customers. Itís only understandable they are asking for competitive prices in the form of rate parity. To understand their possible reactions, just ask yourself whether you would promote a product that is available in the store next door at a better price. So if you are not offering a competitive price, which is only too easy to find out, a reaction will undoubtedly follow, possibly resulting in them pushing your hotel sales less hard.
This leads to an assumption that rate parity will really help to strategically build relationships with your distributors. All your partners get access to the same sell rates, and have equal chances in being successful in their marketing efforts.
Should you come to the decision to run a rate parity strategy, the next step may be even more difficult, implementing rate parity into your operations. Calculating and loading all commissionable and net rates that you give out on a daily basis, keeping in mind tax inclusion and tax exclusion rules of the extranets, can take you up to 4 hours a day. Now imagine the work you have to do every time you make a single rate change.
The answer for this challenge is Rate Tiger Allocator, the extranet of extranets. This platform interfaces with over 100 3rd party portals and allows you to simultaneously update rates and availability from one screen, making implementing rate parity a piece of cake.
|Also See:||Spanish Hotel Chains Set-out Internet Distribution Strategy / June 2005|
|How to Increase Your Hotel's Internet Revenue / May 2005|
|TOP INTERNATIONAL Hotels and TOP City&CountryLine Hotels Choose RateTiger for its Hotels to Manage Extranet Websites / May 2005|
|Best Western GB Recommends RATE TIGER Online Distribution Management Tool to Member Hotels / December 2004|
|Italian Hotel Chain Starhotels Makes Strategic Decision On How to Manage Online Distribution Channels / October 2004|
|Park Plaza Hotel Europe Makes Strategic Decision on Managing e-commerce Distribution, Using RateTiger / September 2004|