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Price disparity types. Identifying and correcting them

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price disparities

Intermediation is usually more sophisticated than hotels and, with the objective of selling more, some channels follow tactics that are not quite ethical, in most cases unknown to the hotel. We are talking about price disparities  in which they follow the simple strategy of showing you apparent parity (which you revise from your hotel during working hours) while they show your clients a lower price. Easy and very effective.

We are going to revise the 6 standard practices of intermediation in order to break the price:

By time slot and weekends

This is the simplest and most regular practice. When you are relaxing or sleeping, they act.

  • How to detect them? Implement a procedure at the hotel so that the night and weekend receptionists search for price disparities and send you a screenshot every day of the main metasearch engines and OTAs where they found. At some point, you will have to give him a credit card so that they can make bookings in order to see where the disparities are coming from, but that will come at a later stage.

By market

You are in your hotel, where no clients live. Therefore, you can see the prices that they want to programme for you while they show other prices to your clients, lower ones, sadly.

It must be noted that there are OTAs who allow the hotel to charge rates per market. Therefore, before confirming if it’s a price disparity or not, it is important to revise that it’s not an intentionally-charged price (and therefore no longer an unauthorised price disparity). By the way, remember to charge the same rates on your own website as you do to ones you exclusively give to a channel in your own country.

  • How to detect them? You need a way to browse the Internet from an IP of another country. Here are a few tips on how to do it in this video we made.

By mobile device

With the mobile-device traffic going through the roof, what better than lowering the price on them, where you rarely check? Perversely simple yet highly effective.

Once again we must point out that, just like in price disparities by market, there are OTAs who allow the creation of rates by device. If you’re using these rates, just like in the previous cases, it’s not a price disparity because it’s intentional. Once again, remember to charge the same rates for your mobile device as you do for your direct channel. If you don’t, you may be shooting yourself in the foot.

  • How to detect them? You could check for price disparities with your mobile device, but it will be a very slow process. You can easily emulate a mobile device from your Opera browser by using the Inspect tool. Find out how here.

By duration of stay

Rarely will you monitor stays of 4, 5 or 8 nights. However, these bookings are the juiciest ones due to their high value.

  • How to detect them? Broaden your knowledge with the night-time and weekend reception team to check on stays of multiple nights, not just single nights.

Micro-disparities

They are reductions of barely 1 or 2 euros, highly regular, particularly when the prices are in a different currency. It appears to be a mistake in rounding off the currency conversion but in fact it is completely intentional. They don’t appear to be too damaging but that’s not the case, since they bring down your return of investment in price-comparison sites because they always occupy the first position thanks to having the best price, even if it’s by a small margin.

  • How to detect them? If you have implemented the procedure to detect price disparities, you will also become aware of micro-disparities. There’s nothing else you can do. However, they will be the last ones you will find out about, since first you will come across the largest disparities.

microdisparidad (1)

Tour operator selling de-packaged

Hotels with the classic tour-operator contracts must look out for them not to distribute these offline and package rates online and de-packaged. It’s also possible that it’s not even their own stock and that they pick it up from a bed bank. In any case, look out for this and stop it from happening.

disparidadttoo

Conclusion

All price disparities are damaging and you must identify them, correct them and create a structure so that they don’t appear again in the future. It’s not a complicated issue and there is no risk involved. The only things you need are knowledge, tools, time and, most importantly, determination to do it. We will publish another article on this topic soon.

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