Hoteliers have a new tool to help them analyze and optimize
distribution costs.
Parity Insight is a dashboard from OTA Insight that tracks where hoteliers
are losing revenue and identifies discrepancies between their brand pricing and
that offered by online travel agencies and other third-party channels.
“They can see how big their loss is, which OTAs they are
losing business to, how much they are losing,” says Gino Engels, co-founder and
chief commercial officer of OTA Insight.
The tool allows revenue managers to view historical data to
monitor the evolution of their performance, track future parity issues up to 12
months in advance and monitor real-time updates on rates appearing on OTA and
metasearch sites.
The company launched the new tool at HITEC, the Hospitality
Industry Technology Exposition and Conference, taking place through Thursday in
Houston.
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Along with the tool, OTA Insight released its first Hotel
Rate Parity Report for North America, based on a survey of more than 97 million
shops of arrival dates across more than 25,000 hotels on brand sites and those
offered by OTAs and metasearch engines.
“In the last couple of years there’s been a lot of news
about the ‘book direct’ campaigns of the chains, and there’s been a lot of talk
of how are we going to get share back from the OTAs,” Engels says.
“We wanted to see what is the state of the nation.”
The results show that for independent or local chains,
during the first quarter of 2018, 48% of the time the rates offered by OTAs were
more competitive than the rates for direct booking. That’s substantially more
often than for the major chain hotels where OTAs offered better rates only 24%
of the time.
Notably, for independent and local chains, OTA prices were
more than 25% lower than the brand rates in almost one out of five loss cases.
The report also analyzed which channels are the main
culprits for parity issues. For both categories - independent and local chains
and major chain hotels - the smaller OTAs were the main source of parity loss.
SnapTravel topped the list for both categories, with Booking.com, Priceline and
Expedia at the bottom of both lists.
“A lot of smaller OTAs are getting inventory from
wholesalers. They are offering rates that should usually be sold as a packaged
or cut rate. These are being resold out in the open on TripAdvisor or Trivago,”
Engels says.
“The locals and independents need to make sure they have
clear contracts in place with wholesale partners that these rates cannot be
sold at these heavy discounts to other OTAs that will resell them online.”
Engels says the rise of price comparison websites in recent
years has fueled business for these smaller OTAs.
“The rise of meta has really has caused this parity to
become a significantly bigger issue because now these local and small OTAs have
a platform that is seen by travelers all over the world, and because they are forced
to put the lowest price first that has a direct impact on the traveler booking
lower rates and the revenue being lost for the hotel.”
OTA Insight is planning to produce future Hotel Parity
Reports, including one looking at the global picture and then specific reports
for Europe, Latin America and Asia-Pacific.
“The entrance of new distribution opportunities like an
Airbnb that’s offering hotels a new platform. What’s going to happen with Google.
If potentially Amazon comes into the market. There are a lot more complexities
for distribution on the horizon,” Engels says.