across Europe trying to drive direct bookings on their websites are being
undercut by online travel agencies that are offering lower rates for their
Insight analyzed data across 146 countries and more than 28,000 hotels on
brand, OTA and metasearch sites. For its report on the European market, it
included a cross-section of major chains, independent and local chain hotels.
analysis found that for independent and local chains, 52% of the time OTA rates
were more competitive than the hotel’s website rate. For major chain hotels,
the OTA rate was lower 44% of the time.
is still a massive gap between what the chains are saying … that they want to drive
direct bookings, and the reality where there is still almost half of the time a
better price on an OTA,” says Gino Engels, co-founder and chief commercial
officer of OTA Insight.
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says the root of the problem is wholesalers who are now unbundling their
heavily discounted rates and selling them to smaller, non-contracted OTAs.
Those OTAs then push those rates online via metasearch sites, where they surface
at the top of price comparison searches, undercutting rates offered by hotel
brand sites and larger OTAs that have contracted parity clauses.
OTAs are out of parity 38% of the time for major chains and 46% for
independents and local chains. The most frequently tracked channel for parity
loss issues across all European hotels analyzed is eSky.com.
onward distribution shouldn’t happen,” Engels says.
need to have better contracts in place. It should clearly state this rate can
only be sold when it’s bundled.”
shift in bookings from offline to online has caused wholesalers to lose market
share, and Engels says by selling unbundled rates they are able to reclaim some
of that, incentivizing them to continue the practice.
why it’s a cat-and-mouse game,” he says.
big global chains are going to the wholesalers and saying you can’t do this …
and the wholesalers say they are working on it, but at the same time, it’s a big
revenue driver for them.”