Hotel Rate Parity and Distribution Costs
This article examines hotel distribution costs, rate parity and the value delivered by online distribution channels. It explores OTA dependency, commission models, hotel pricing control and the importance of building a strong online market position.
Let this article serve as an answer to some questions raised by hoteliers regarding intermediation costs, particularly when Booking.com accounts for more than 60% of sales in many cases.
I am not particularly in favour of hotels maintaining rate parity across their various distribution channels. Among other reasons, distribution channels are not all the same: they do not apply the same intermediation cost parity, nor do they have the same positioning in every market.
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