Q164: Why is rate parity such a pervasive issue in online hotel distribution?

February 19th, 2019

The inability to maintain consistent hotel room rates across the global travel marketplace undermines the logic of what a traditional product distribution flow should look like.
— LB

On this episode of QuestCast, we talk to Nadim El Manawy from Arise, a hotel distribution technology startup looking to fix a big challenge in today’s hotel distribution landscape. Room rate parity - or the lack there of.

The core issue here is the practice of undercutting hotel direct rates by third parties. This undermines the logic of what a traditional distribution flow looks like, where the supplier controls lowest price advantage.

So what’s going on here? The proliferation of online channels and the fragmentation of how hotels get bought and sold have made it harder for revenue managers to police and control how and where their room rates show up in the global travel marketplace.

This is problematic because it hinders their ability to effectively allocate hotel inventory to the most cost effective channels, but also when it comes to building direct relationships with the consumer. Here, Nadim talks about how pervasive the challenge actually is.

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QuestCast topics are sourced from Quest360, our database of timely, strategic questions now being asked across the travel industry value chain.