Hotel rate parity in the focus: Is there a need for change in the relationship between hotels in Berlin and their wholesale partners?

Abstract

Recent developments in revenue management at hotels in Berlin have brought a lot of challenges in upholding rate parity, particularly in the wholesale segment. Little research has been done on this topic, especially with regard to the advantages and disadvantages of partners in such agreements. This study focuses on the control over rate parity and what changes have to be applied to mitigate the danger of termination of business relationships between hotels and their wholesale partners. The research, based on in-depth interviews with hotel and wholesale managers, revealed that there are systematic problems in communication between hotels and wholesalers. Other issues that need to be improved, as revealed by the research, include the excessive control of third parties, the new pricing models and the flexibility of both parties. Establishing real-time connectivity is the key factor recommended. Other recommendations are the implementation of a more flexible approach to hotel policy of 100% dynamic rates, and finding more market-specific solutions such as keeping rates static for certain target groups. The results also demonstrate that controlling the rate parity will not be solved by the wholesalers themselves. A common control system is advocated in which hotels have to take over an important role by using their worldwide network and technological resources.

Keywords: wholesale, revenue management, rate parity, channel control