Keep a close eye on rate parity with an innovative tool from Availpro: ParityScreener
Deal with rate disparities, avoid taking unneccessary – and costly – indirect bookings, and redesign your parity strategy with Availpro’s new ParityScreener tool.
Talking to our clients, it has become clear that rate disparity in online distribution is an increasingly significant issue for them. When a hotel brand website is undercut by another channel, the number of direct bookings falls. Hoteliers work hard to avoid this, but effectively monitoring rate parity across a hotel chain or group day by day is no easy task.
Availpro works with a number of groups and chains, and it was with them – and this specific problem – in mind that we developed ParityScreener. This innovative new tool allows central management to gain an immediate overview of parity issues and communicate any tactical adjustments required to hotel managers.
Win, Lose or Meet?
When analysing parity, there are three broad categories: win, meet or lose:
- A ‘win’ scenario for a hotel is when the rate on the brand website is cheaper than all the other distributors, thus encouraging more direct bookings.
- A ‘meet’ situation is when all the rates are aligned on every portal with every distributor.
- A ‘loss’, however, is when one or more distributor is offering a cheaper rate than is available via the hotel website, a situation that will likely lead to more indirect bookings. The price paid for those bookings is cheaper than it should be and you are also paying a commission to sell those bookings at a lower price – double punishment.
In fact, a loss situation can cause even greater pain than just paying excessive commission to OTAs. At Availpro, we talk about ‘direct customers’ rather than just ‘direct bookings’, because a direct customer is more likely to spend more and be more loyal than someone who books indirectly. You have more information about a direct customer and also more opportunity to tell them about hotel facilities. Consequently, you are a more likely to upsell ancillary services – spa packages, room upgrades etc – prior to and during their stay, and they are also more likely to return to your hotel (or hotels) in future.
A study of upscale hotels by Kalibri Labs showed that direct customers spent over 30% more on ancillaries. Another report indicated that if the hotel price is the same price as the OTA, 65% of consumers would choose to book directly with the hotel. If the hotel price is 10% higher, this percentage drops to 51% [source: Koddi]. So, clearly, there is a strong desire among consumers to book direct, but maintaining a ‘win’ or ‘meet’ parity situation will increase your chances of capturing their business.
Break it down
ParityScreener enables you to break down the data and analyse it in different ways. For example, by region, so for a group of hotels spread across the world, you can look at each country or city individually.
The tool is proactive, offering twice-daily auto-updates and on-demand refresh. The hotelier can also build alerts within the interface so that when a situation of loss happens, he is immediately made aware of it. ParityScreener can warn the user of such issues up to 365 days in advance (depending on how it is configured).
The notification comes via email, highlighting the five booking dates that are most concerning, and with an attached Excel sheet showing all the other dates that are potentially problematic.
So when the top management sets a goal, every country leader or hotel manager can set its rules to comply with the global strategy. Say the GM of a hotel group gets notification that the parity strategy is not being respected by a hotel in Cannes – they can immediately call the revenue manager there and say, ‘Okay, we have OTA undercuts on these dates – I want you to take action on that’.
Screen to win
We see ParityScreener as the ideal companion to our RateScreener tool (which compares a hotel’s prices with its competitors), offering an overview and level of insight on parity strategy that can deliver significant ROI gains on a hotel group or chain’s booking engine.
Since launch in March this year, the feedback from our clients has been great. Everybody is impressed, because when you manage a big group of hotels, you simply don’t have time to check parity hotel-by-hotel.
So why not let ParityScreener do the work for you and make parity losses a thing of the past?
Parity Screener at a glance
- Simply track your chain parity with Win-Loss-Meet ratios
- Set up your own customised alerts
- Receive warnings when your parity strategy is incorrectly applied
- Monitor the parity per region and adjust decisions locally
- Track parity by booking window and identify the most pressing issues
- Expedite decision-making and action on disparities
For more info, you can also check out our infographics here.