January 23, 2013

How ‘closed user group deals’ can undermine your hotel’s direct booking strategy

The rise of hotel apps and deal sites that are based on 'closed user groups' not only result in higher discount levels for hotels, they also send a clear message out to the consumer: direct is not the best way to book hotels.

More and more OTAs are approaching hotels to offer special rates to their various 'member groups' with the condition that they must be a certain percentage below prices offered to the public. The promise being that these offers are given only to a 'fenced' audience and that general consumers don't get access to them.

Not only are OTAs thereby compromising rate parity and other terms that they expect hotels to comply with, they are also promoting a shift in the online distribution landscape from being that of 'retail with pricing parity' to a very opaque environment where the best price is far from being transparent to all parties.

It looks like OTAs are trying to do everything at once with this model by trying to compete with traditional/online wholesale, with flash/ deal sites as well as last-minute booking apps and the likes. Left unchecked the impact can be quite massive for hotels.

Get the full story at EyeForTravel