|Rate Parity is Biggest Dilemma for Hoteliers.|
From Web in Travel
Thursday, 21st June 2012
A new study by Ecole Hôtelière de Lausanne and RateTiger reveals rate parity is the dominant factor affecting hotels’ distribution and revenue strategies today.
This has also resulted in hotels neglecting the fundamentals of revenue management but has also opened their eyes to alternative distribution techniques.
The multi-regional study (conducted in five countries), “The Distribution Challenge 2012”, found that revenue managers are using channel management tools and price shopping reports more than ever, up to 11 times a day on average, to drive revenue on their main channels.
However as they struggle to maintain price consistency they are now seeking new ways to improve exposure, reach new markets and increase direct bookings.
"Retail sites are continuously monitoring rate parity placing a lot of pressure on hotels to update rates on their channels," said Horatiu Tudori, senior lecturer, revenue management of Ecole Hôtelière de Lausanne, Switzerland. "Hoteliers are spending more time managing rate parity and ensuring rate integrity which is taking them away from defining more sophisticated strategies to reduce the cost of distribution and increase RevPAR."
The six-month study found that the top three issues revenue managers want to focus on continue to be increasing RevPAR, controlling costs of distribution/e-business, and increasing exposure.
"The hotels defined the strategies they put in place for 2012 as being the need for RevPAR improvement to be achieved by higher rates and ADR, or by increasing LOS (length of stay). Their key challenge will be decreasing costs of distribution while raising rates and occupancy all at the same time ensuring rate parity across their distribution partners to avoid strict policy conditions," added Tudori.