Stage 3: Bargaining ⇒ “If I Try Harder, I Can Get It.”
After the anger stage, a certain desperation sets in. You tell yourself if you do everything right, monitor channels, match promos, and offer a gimmicky direct discount, perhaps you can finally achieve the parity unicorn.
You begin frantically running your private promos, mobile discounts, and adding value propositions with the energy of a caffeinated squirrel. This is when you also discover that your current technology can’t actually support half the things you want to do. So you start shopping for new vendors, convinced that the perfect new booking engine will be your salvation. It’s like thinking that buying a better pan will automatically make you a master chef — technically helpful, but missing the main point entirely.
Unfortunately, effort is not enough to beat the odds. Maybe you can count cards in blackjack, but you cannot negotiate with a slot machine.
Stage 4: Depression ⇒ “The (OTA) World Is a Vampire.”
Next we officially enter what I like to think of as the goth stage of rate parity. Reality hits like a brick to the face. This is when you realize that independent hotels without OTA exposure are about as visible online as a black labrador in a coal mine.
The anger and bargaining stage decisions have led you to scale back on OTA participation. Now you are staring at your dreaded STR reports, where your competition is doing circles around your hotel like they are Formula 1 drivers. Meanwhile, you are stuck in a pit stop of your own making. The revenue decline isn’t sudden — it’s more like revenue diabetes at this point, with market share slowly draining.
There is a level of sadness in realizing the mathematical truth: there really is no free lunch. The rate parity pain you tried to avoid by abandoning OTAs has been replaced by the much sharper pain of empty rooms and tumbling revenues. I have to say this is the saddest stage. The right amount of coffee and courage can help propel you out of this stage and into the next one.
If you know someone who is stuck here, they need a good hug. Just please ask before giving it to them.
Stage 5: Acceptance ⇒ “Make Hospitality, Not War.”
This is the stage where my closest and wisest hotel industry folks live. But to get here, you first have to experience the stages above. It is painful, but the enlightenment in the end is worth it. This is where you finally accept the following simple truths.
- Your guests are not stupid. Stop panicking. Yes, they saw that Mr. & Mrs. Smith’s hotel was showing 40% off with $100 F&B credit, and then they saw “Super.com” showing $100 lower rates, and then they saw another random reseller on Google Hotel Finder undercutting your rates.… But they know that most of these rates are not real once they go a few clicks deep into making a booking. Most travelers know that nothing beats booking direct when it comes to looking for help, changing reservations, dealing with last minute upheavals, getting upgrades, requesting airport pickups, etc, etc. They would rather speak to your hotel team instead of a call center on any given Sunday.
- Freedom of choice is real. Hotel guests aren’t mindless, price-driven sheep. They want value and they’re perfectly capable of choosing where to book based on their own preferences and needs. Yelling “book direct” at them does not really help. People who like to book direct will always do it. Expedia, Amex and Booking loyalists will do what they need to do to get that (points) bag. Keep calm and carry on.
- Choose common sense over angst. There are some things your hotel revenue manager can do for you; other things are completely outside of their control. OTAs and their AI can create ghost room categories, undercut commissions, and update ads at a lightening pace. That is what they are designed to do. You and your revenue manager can use common sense to match promos wherever possible. Don’t worry about the impossible. The conversation needs to refocus onto how to give your guests the good ol’ razzle dazzle when they do book direct with you and keep them coming back!
- It’s the hospitality business, not a distribution war game. Somewhere along the way, hospitality has taken a back seat. Time to change that! Revenue strategy isn’t a zero-sum death match with your distribution partners. It’s more like a complicated dance where everyone needs to know their steps. Your revenue manager is conducting an orchestra. Yes, some individual member of the team will miss a note sometimes, but the show must go on. A good revenue team will keep you moving forward despite any missteps.
I really hope you get to this stage soon and I will C U When U Get There (RIP Coolio).
Conclusion
The hotel rate parity acceptance process is a natural progression. The sooner we reach the acceptance stage, the sooner we can stop playing games and start making money. The goal is to return focus to the hospitality side of things so that people will want to come stay at our properties.
“Life is pain. Anyone who says differently is selling something.” (Dread Pirate Roberts, The Princess Diaries). In our case, they’re probably selling a website, booking engine, or revenue management software that promises to solve all your distribution and revenue problems while you sleep. It is important to have the right technology, but that will never replace the value of having talented (and accepting) hotel management and revenue teams that support each other in reaching the common goal of providing excellent hospitality at optimal rates.
Now, if you’ll excuse me, I need to go see whether Booking.com, Priceline and Expedia are running any new promos undercutting the hotels I am currently working with…and then go for a long walk.
