OTA Insight, a cloud-based data intelligence platform for the hospitality industry, today released its Annual Hotel Parity Review. The findings outline root issues surrounding rate parity for hotels, such as wholesalers that break the chain of contracts between hotels and online travel agents (OTAs) by selling discounted rooms to non-contracted OTAs, effectively allowing them to undercut hotel room prices significantly. Additionally, the Annual Hotel Parity Review provides a benchmark for hoteliers to understand parity performance in different markets across Europe and North America.
“As an advocate and partner for hoteliers, we spend a lot of time working with them to uncover and understand their key business concerns and constraints,” said Sean Fitzpatrick, CEO of OTA Insight. “Rate disparity is a huge problem for our customers but it also impacts the major OTAs, so we wanted to shed light on some of the root causes.”
Most hoteliers recognize that they need a diverse mix of distribution channels to maximize their reach. However, many third-party sellers are not playing fair, and as a result, hoteliers are suffering from losses in revenue while also undermining their direct sales and marketing efforts. In fact, according to OTA Insight’s findings, major North American hotel chains are negatively impacted 24 percent of the time by non-contracted OTAs, while major European chains are negatively impacted more than one-third (36 percent) of the time. Additionally, these figures are much higher for independent hotels and local chains.
The company’s Annual Hotel Parity Review examined the European and North American rate parity trends for 2018. The report provides visibility into the differences between major chains (based on nine of the leading global hotel chains within the hospitality market), and independents and local chains (a range of independent properties and local market chain hotels).
Among other key findings, the report showed that in North America, OTAs are more likely to be in parity with major chains than independents and local chains. Market-wide, there are significant parity loss issues with independents and local chains facing losses on 46 percent of tracked shops in comparison to 35 percent for major chains.
Research for the report was undertaken by the market data insights team at OTA Insight. The online market survey gathered OTA Insight data from 2018, across 146 countries and more than 28,000 hotels globally on brand.com, OTAs, and metasearch sites.