How Budding and Small Hotels Can Lessen The Effects of Rate Parity

Rate parity is a term that always alarms hoteliers and can even be a growth barrier for small and new players. Rate parity is the practice of maintaining consistent and same rates of the same room type on all the distribution channels/booking platforms, be it hotel’s own website or OTAs irrespective of commissions being earned by an OTA. The objective of this practice is to create leveled playground for all the players alike. Both hotels and OTAs have to agree to rate parity norms when they sign up with an OTA.

At times, this leveled field makes it difficult for new players to compete in this fierce competition and suffocates them even before they can spread their wings.

How should hotels look at Rate Parity?

The practice of Rate parity came up to safeguard the interests of OTAs from situations where hotels can reduce their website rates and cut OTAs.

Why hotels rely heavily on OTAs?

OTAs provide a readymade platform for any hotel to clinch bookings from the very first day they enter the world of online booking. They do not have to spend heavy on marketing, just negotiate better deals with the right OTAs and they are set to make revenues. Hotels can easily look OTA commissions as their marketing costs but with a higher success rate. Hence, the advantage that OTAs offer to hotels somewhat nullifies the disadvantage of rate parity to hotels.

What are the challenges of rate parity for budding and small hotels?

In small and new hotels, every single booking is crucial. Paying hefty commissions to OTAs from already thin margins becomes very difficult for hotels. This is where direct bookings can prove to be a game changer. However, fetching direct bookings can be an uphill task without promotional campaign and price manipulation. Many times, OTAs will ask hotels to keep them in the loop when they run any promotional campaigns or discounted pricing on their websites. To prevent any breach of Rate Parity clause sometimes small hotels exclude the entire room category from OTAs and sell it on their website at their own prices.

Competing with OTAs for prices is difficult for small hotels since OTAs are known to reduce prices below agreed prices by reducing their commissions. We do not live in a perfect world!

This requires hotels to keep a check on prices of various OTAs to keep their prices competitive with them. When OTA channels are not directly linked to a hotel’s PMS system through a channel manager, rate parity is even more difficult to manage. Hoteliers then have to log into multiple systems to update their rates. However, it is much easier and faster, if the hotel is using hotel technology tools to manage all this.

Few are of the opinion that in this situation, small hotels are stuck between a rock and a hard place, as the saying goes since on one hand, they do not have the marketing budget to achieve the kind of reach that OTA provide. On the other hand, it is difficult for them to pay the big fat commission to the OTAs. Moreover, OTAs bring them business. Hence, hotels want to drive more direct bookings. However, this course requires more dollars to spend on marketing. They are in this vicious circle.

Here are some tactics that hotels can use to tackle rate parity challenges

Creating bundled packages

Hotels can augment their offerings keeping the price same as OTA price by adding perks like free parking, Wi-Fi, wine tasting sessions, complimentary breakfast, sight-seeing, free pick-ups, etc. This practice can help them have a clear edge over OTAs without violating rate parity norms since for the same price the hotel is offering a better deal than the OTAs.

Lower your rates to a limited audience.

Hotels can reduce the prices for an age group, category, Close User Group (CUG) or mobile app users. Run e-mail promotional offers for CUG members or on mobile app bookings. This can help them drive direct bookings on their website and mobile app without violating rate parity clause.

Loyalty Program and Customer Engagement

Another way to boost direct bookings is loyalty programs. Loyalty programs provide manifold benefits apart from just saving OTA commissions. Getting a repeat booking from a loyal customer is far cheaper than acquiring a new customer. On top of that, hotels are aware of their choice and preferences that enable them to serve them even better. This spreads positive word of mouth for the brand and paves the way for more direct bookings.

Use Meta search engines

Meta Search engines like TripAdvisor and Trivago can be considered as a savior of small hotels. Small hotels can even feature on top of the list in TripConnect since it works on a PPC model unlike commissions as in case of OTAs. Metasearch engines are quite popular among consumers since they not only provide a comparison among different properties but also allow them to choose the cheapest channel to book the hotel. Consumers are often seen to resort to book direct provided the difference is not huge since direct bookings are considered more reliable.

User-friendly website and booking process

To boost direct bookings hoteliers must ensure that they have the necessary infrastructure in place, which induces and propels direct bookings like – a comprehensive user-friendly website with a clean interface providing all the necessary information without having to search for it. In addition, the hoteliers must make sure that the booking process is simple instead of cumbersome so that prospects do not bounce back. OTAs have a clear edge in this department, but hotels have no choice but to bring their online infrastructure at par with those of OTAs.

From above discussion, we may assume that while Rate Parity agreements can decelerate the direct bookings of any hotel; there are numerous factors that prove that OTAs are in fact good partners with hotels. Hotels can adopt several bypass strategies to mitigate the defies of Rate Parity and the same time enjoy the large number of bookings from the OTAs


How Mobile Apps Can Help With Homeschooling

The real benefit of all mobile apps, regardless of the primary purpose, is that they help keep people connected, which is exactly how apps can help homeschooling parents across Australia. The Daily Telegraph reported earlier this summer that more than 6 children are being pulled from their mainstream school every week because of problems such as:

– Learning difficulties not being properly dealt with

– Dissatisfaction with educators

– Bullying

A record number of children are now being educated at home in NSW and other states across the country. While the popularity of teaching children from home is on the rise, that doesn’t negate the fact that there are still concerns with homeschooling. One of the main concerns that most parents and educators have about teaching children in a home setting is the potential disconnect between the government mandated education system and what children at home are actually learning. With easy-to-use applications, however, bridging the gap between the two is becoming easier than ever.

Keep Up To Date

Homeschooling parents would really benefit from having at least two mobile apps related to education on their smartphones and tablets: one app that connects them to a credible and preferred homeschooling resource centre where they obtain information such as:

– What to teach their child

– When to teach it

– How to assess their child’s progress (tests, papers, etc.)

The other app could be to the district’s education system. This way parents can receive information and news from both the homeschooling side and the regulated educational side, so they can ensure that their child’s educational requirements are being met.

Send In And Receive Reports

The Board of Studies has reported that they only need to check in with homeschooling parents and children every 6 months to 2 years. They do this by asking parents to submit to an accreditation process and stop by for a home visit. With that kind of lapse in between routine “checks”, this means that the school boards are grossly out of touch with their homeschooled children.

There are a number of reasons behind why this is, but having an application that allows for reports to be easily and seamlessly sent in at predefined intervals can definitely improve the communication process. Parents can easily send progress reports in to the Board of Studies. They can receive updates and reminders from the Home Education Association. The communication channels can be opened in a way that was never before possible.

Online Testing

There are some murmurings that some schools may also begin using mobile apps to conduct formal testing. This means that homeschooled children, in the future, may be able to take government tests right along with their peers in the future and send it in electronically.