Whenever the topic of ‘parity’ crops up, the rate parity is what everyone will think of. Every hotel revenue manager is worried about rate parity. They moan about how the rate parity agreements with OTAs have meant lesser profits for them. There is always a struggle by the hoteliers to get more direct bookings to remove the impact of rate parity agreements.
Factors like content and room parities are the least discussed among the hoteliers.
Yes, rate parity agreement with the OTAs is a big factor. You are not able to sell your rooms even for a rupee less than what you have mentioned in an OTA portal.
Users log in to OTAs, compare hotel prices and go for the cheapest and what they like. Even if they book your room, you end up paying commission to the OTA.
But, the OTAs are here to stay
Make My Trip posted a 27.7% increase in revenues for the quarter ended Dec 31, 2013.
Its revenue from selling hotel rooms and packages stood at $50.1 million for the 3rd quarter of the last financial year. (For the quarter ended Dec 31, 2012, the figure stood at $48.6 million).
Yatra.com expects a 40% sales growth in FY 15 mainly fuelled by increased hotel bookings and tour packages.
Do you need OTAs?
The OTAs spend a lot of money in ads and other marketing channels to stay ahead. (Expedia spends US $800 million on their marketing.) So it makes sense to channelise the reach and power of OTAs to your advantage and drive more revenues and direct bookings.
Chris Anderson of the Cornell University explored the booking behaviour of hotel consumers. His study revealed that a hotel’s mere presence on an OTA portal boosts direct bookings on the hotel website.
How can you use room and content parity to your advantage?
Most OTAs mandate that a hotel feature all sorts of rooms in their portal. But more often than not, many hotels don’t do this. The hotels keep the best of their rooms with themselves for direct bookings. The average rooms and those with drawbacks are usually passed on to the OTAs to sell.
Are you also following this practice?
If so, it is time for a change.
The brand loyalty among hotel customers is at an all-time low. Your hotel has become another commodity in the market. Users go to the OTAs to find the best rooms at the lowest price. So, if they are unable to find the best of your rooms in an OTA portal, it is possible that they will give your hotel a miss and book with your competitor who might have featured every room in an OTA.
The study by Accenture of more than 12,000 consumers in 32 countries found out that guests are nowhere loyal to any particular hotel brand.
60% of the study participants said that they consider 2 or more hotels while browsing for accommodation.
Feature every room of yours in all OTA portals. Yes, you might have to shell out commission for these bookings to the OTAs. But doesn’t it help you?
You get new guests, who otherwise would not have come to your hotel. Once they book with you, you can even charm the guests and can even promote direct bookings to them in future.
Have a relook at your content too across all portals and your website. Check whether the room names and the descriptions in the OTA portals match with what you have on your website. For instance, if you have used the name ‘king’s suite’ for a particular category of rooms in your hotel, ensure you have the same name on your website and OTA portal as well.
This applies to the hotel amenities and features too. Don’t forget to list all the amenities you have in your property, however small and insignificant they might seem, on OTA portals and your website. It could be even a coffee maker in the room. But it pays to mention every possible feature and amenities of your hotel at all possible selling channels.
At times, it is found that an accurate description of rooms and amenities are found in your website, but the same is not mentioned on the OTA. This is a mistake which you should avoid at all costs. There are people who look for amenities and services before zeroing in on a room. For instance, a person might require free Wi-Fi access. One might even be searching for a disabled friendly hotel. If you have not mentioned these on OTA portal, there are chances that you might lose a customer.
Providing the details of the room and property gives you an advantage in terms of SEO within the OTA portal.
It could be true that room parity and content parity across all channels might not bring you a lot of customers. But at times when you struggle to increase your average occupancy rate, these customers could make a real difference to your fortunes.
So, what are you waiting for? Go ahead and have room and content parity at the earliest.