Rate parity plays an important role in managing your brand, especially in the online marketplace. Here’s everything you need to know when managing your room rates and distribution:
It is a policy that is highly beneficial to OTAs, that have access to a vast number of travellers and require commission rates from B&B operators.
The idea behind rate parity is that it will level the playing field for all distribution agents, but the perception is that it ultimately punishes B&Bs that earn less revenue when the majority of their bookings come from larger distribution agents charging hefty commission rates.
Rate parity can sometimes put B&Bs at a disadvantage because:
The majority of countries around the world consider rate parity to be a completely legal business practice, despite the fact that it is detrimental to small business owners like B&B operators.
However, there is a movement in Europe in which several countries have begun to make rate parity illegal in hopes of levelling the playing field between large distribution agents like OTAs and independent accommodation operators. The countries where rate parity is currently illegal include Austria, France and Italy. Other countries are in the process of banning rate parity policies, including Switzerland and Belgium. Germany has also enforced stricter regulations on rate parity.
Unless you operate a B&B in one of the countries that has banned rate parity, the fact of the matter is you will still have to deal with these stringent policies. Luckily, there are things you can do to help improve your success despite being forced to keep consistent rates across all of your booking channels.
Here are a couple of tips:
Rate parity is going to continue to be a hot topic in the B&B industry for the months and years to come. You can read more on it here.
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