The future is price differentiation – do you agree?
19/09/2013 by Yeoh Siew Hoon

During the panel I ran at the China Travel Distribution Summit in Guangzhou, I asked a final question of my panelists, “What’s the one trend they’ll be watching in the next 12 months?”

Most cited was China outbound and regionalization of online travel; however the answer was Stan van Roij, managing director of INFOR EasyRMS was “Price differentiation.”

So what exactly does he mean by that, I asked him.

Here’s his take:

“The hotel industry has adopted a price parity policy that basically states that all channels would be distributing the same price for the room, so be it on brand.com or Agoda, or booking.com, or via GDS, or via the phone, the price is, say USD100.

“This was done to overcome the non-parity issue that was in place, where the OTAs had actually lower rates than on the direct hotel channels (own website, phone, etc).

“What we now see is that some hotel groups are going back to non-parity, but then the other way around, ie some (or all) of the OTAs will have a higher price than their own channels. The strategy is called channel differentiated pricing.

“I know that especially in Asia, there are many hotels who are not even in the price parity situation and that you can find cheaper rates on OTAs versus their own channels, but the organised hotel groups are getting their act together and the non-parity in favour of OTA’s will be less and less.”

Do you agree?

Should make interesting fodder for debate during the “The Asia Factor in Pricing” session at the WIT Conference next month.

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