John Burns is one of the chaps you can always rely on to give an accurate state of the hospitality and lodging market.
Indeed, he recently wrote an article Is All Lost for Hotel Brand Websites in Hospitality Ugrade, containing more than just a few pearls of wisdom.
The article describes the battle between what users and hoteliers think is accurate pricing and property information. This battle is now well and truly raging.
One of the key arguments he makes is that the hotels took far too long to provide detailed content on their properties in a form that made sense for the consumer.
Consequently others did the job for them - and, seemingly, a better one. Perhaps the most important element he found around hotel information is the total lack of rate integrity.
As Burns says:
“Yes, the hotel industry has lost the confidence of some lodging shoppers. They have found the more detailed information that they want elsewhere.”
And then, in a note of hope, he adds:
“But I do not think this loss of relevance (and relationship) is irretrievable.”
That may be so, but I am not so optimistic – not least in the short term. Hotel rates are all over the place and the hotels have done a pretty bad job in trying to get control of them.
But rather than tackle the problem in a pragmatic sense – and embrace dynamic pricing – most hoteliers decided that they would try and enforce rate parity and punish those who transgressed.
But the problem is that there are different ways that the hotel communicates. Rates are going down one path (via the channel managers) and availability of rooms at these different rates is even worse than the airlines.
One could point a finger at the large switch players who avoided the concept of availability for so long. The hotel equivalent of coach/economy class (Run of House) rates are all over the shop. And there is reason to it.
To make matters worse, this battle spilled into the public consciousness through a battle between two players who actually have little to do with reality of rates.
It has drawn in the UK's consumer protection body, the Office of Fair Trading, and has now embroiled none other than Booking.com and Lastminute.com.
Much to the chagrin of the larger players, a small UK discount hotel site Skoosh has decided to put the matter to the extreme test, by being the trigger for the formal investigation by the OFT.
The end result could actually 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, be 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.
And I might add here that the rate discrepancies are clearly as a result of the unnecessarily complex way the industry has handled them.
Of course, it is worth mentioning that many properties are still using fax either directly or via Expedia and Booking.com. This still surprises many in and outside of the industry.
Perhaps there is some hope. At least one hotel chain (IHG) has started to try and attack the problem in a logical way, at least at the high end, by urging large volume buyers to adopt dynamic hotel pricing.
NB: Part Three tackles the issue of dynamic availability and search.