Rate parity is one of those hot topics in the accommodations industry, and it’s essential that you understand how rate parity can impact your B&B business.
What is rate parity?
Rate parity is the process of keeping your room rates consistent across all distribution platforms. This means that a traveller who discovers your property on a search engine should see the same price on your B&B website as they do on an OTA website. Rate parity is not only good for your prospective guests, but it helps you attract more distribution partners as well.
What do B&B operators need to know?
- Rate parity prevents business complications
When your room rates are inconsistent across platforms, you run the risk of upsetting your customers and angering your distribution partners. Travellers who begin to notice that your rates are cheaper on different platforms will get mad if they booked through a more expensive channel. Your distribution partners will begin to feel like you are favouring one agent over another, and they won’t want to work with your brand anymore. Inconsistency in room rates also leads to overbookings, which is a customer service nightmare for any travel brand. By achieving rate parity, you will find that daily operations at your B&B run much smoother than if you had inconsistent room rates across your distribution network.
- Rate parity can boost your revenue
Rate parity is a basic requirement in most agreements with OTAs. As a small accommodations provider, you need to partner with the major players, like OTAs, to increase your visibility and attract travellers from across the globe. When you make rate parity a priority, you’ll be able to easily connect with agents who will help boost your revenue. In addition, prospective travellers will recognise that they can book your rooms in any way they prefer, and still get the same rate. This also will drive bookings at your property, and subsequently increase the revenue you generate.
- Rate disparity can be prevented
Achieving rate parity is sometimes the easy part, it’s not always as simple to maintain it. However, when you implement an effective communications strategy across your distribution network, you can prevent rate disparity from occurring. With a channel manager in place, you can instantly update your live rates and availability across your entire distribution network. This ensures that every agent has the best, most reliable information on hand at all times. The right technology is critical when it comes to preventing rate disparity.
The bottom line is, rate parity matters. It is important that both you and your distribution agents make an effort to achieve rate parity, and to maintain rate parity even as your room rates fluctuate throughout the year.