Leave a Reply

Your email address will not be published. Required fields are marked *

The Parity Problem… It goes deeper that just Rate Parity…

Okay, so you got bug-bear number 1 didn’t you? The Mirror Marketing issue… So lets move to my next Achilles Heel…

Rate Parity clauses I can almost live with but what about Availability Parity?

So lets be honest, not all OTA’s are guilty of demanding allocations and the reason we all ‘play nice’ with Booking.com is because as hoteliers, often the only interaction we have with Booking.com is the ‘back-end’ and lets face it, they are oh-so-flexible. They allow us to close out. They don’t demand allocations. Gosh that is nice of them isn’t it? Fluffy, flexible, easy to work with… Isn’t that why we are all so captivated – caught by the easiness of it all. But oh my, do we ever forget to look at the ‘front-end’ and what our customers see (subject for another Blog I think).

But what about one of the other big players. How many of you have directly contracted with OTA’s that demand allocations? Let use Expedia as an example (although I am of course aware that there are others but for ease of reading, lets run with Expedia). How many of you have willingly given up 2/4/6/8 rooms on allocation with maybe a 14/7/3 or even lord forbid a 24 hour release?? First of all ask yourself, who is signing these contracts? I often find that junior sales people (no disrespect meant as I was one of these – and loved it – only a few not-so-short years ago) can be intimidated by the Powers-That-Be thinking that if they don’t sign there and then and in blood the they will be ‘struck off’, forever doomed in the caverns of an OTA black hole… But honestly, these contracts are way too important and if it isn’t passing over a Director Of Sales, General Manager or better still, a Revenue Manager’s desk then you potentially have let yourself into a pot full of trouble…

And here’s why… Picture the scenario… lets say you have a group in house next Saturday. You are full. Every room is taken. You have closed all channels – GDS, booking.com, hey even your own brand website. But wait! Expedia still have that 4 room allocation on a 48 hour release! So here is the absolute bottom line – you can’t sell. You can’t take a room booking over the phone or on your own brand website, but hey, Expedia have 4 lovely rooms to sell.  Keep coming they call! We have rooms! We are open for business! Hey, if the internet had been around even Mary and Joseph could’ve got a room… But alas we can’t accommodate guests who want to stay at our own hotel. Hand’s up who has a stable to out-book to? (and apologies if I am offending anyone – not meant to – just a tongue in cheek analogy to a story we all know). But answer me this, why as an industry do we allow this? Why do we let the OTA’s call the shots on Rate Parity when we are also willing giving away Availability Parity?

And for those of you using channel managers, make no mistake, Expedia will not use their allocation first.  They will actively take rooms from your normal pot of inventory and keep their allocation right to the end – right until they need it and when all other channels are closed – even your own.

Then there is scenario number 2 – let’s say you have contracted Expedia to a 2 room allocation of Standard Rooms but again at hotel level you are full on all room types except perhaps your Suites – your highest priced room category.  So imagine an ordinary browsing customer does come to your own site to check and book – what do they see? Well, they see that you are selling €200.00 per night higher than Expedia!  Not lets be brutally honest here, not all customers do what we want them to do – they don’t read all the lovely flowery text we have written about how wonderful our Suites are. No – they look only at what catches their eye and that is the price and hey presto, they move away from our ‘too expensive to book direct’ lovely website and move back to Expedia. Lost again…

Expedia is absolutely not the only OTA to blame. Some of us have consortia deals and contracts that expose us to exactly the same thing.  So when are we going to start smelling the coffee? Again, I urge you to re-look at contracts and please, don’t be afraid to negotiate and protect yourself. OTA’s demand a level playing field with Rate Parity so why shouldn’t we be able to operate on a level playing field with our own availability?  As an industry we need to come together and say, ‘we would like some control back… please…’