According to a report published on April 23, by Colliers International on ATM’s Global Stage, rate parity agreements have led to a turbulent relationship between hotels and OTAs in recent years. The findings of the report, entitled; Alternative Accommodation – Driving Growth for Destinations or Disruption were discussed by a panel of experts from Wego, AccorHotels, Expedia Group and Colliers International.
The essence of rate parity is to have the same rate for the same product across all distribution channels. However, rate undercutting has created issues between hotels and OTAs and as a result, significantly reduced consumer confidence in brands.
“Today’s consumers have a more sophisticated mindset and level of needs, and as a result, rate parity is hindering the ability of OTAs to make more money and hotel companies to offer higher average room rates,” revealed Filippo Sona, director, head, hotels MENA, Colliers International.
Hotels and OTAs have their own competitive advantages and limitations. While hotels have the micro information, OTAs have the purchasing and booking habits of consumers therefore working together would help both connecting industries to develop.