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Rate parity

Rate parity is the commitment to offer the same public price across all channels. Many OTAs require it by contract so the hotel does not undercut them. It is a contentious topic because it limits the hotel's freedom to reward its own direct sales.

Example Under strict parity, the hotel cannot advertise a lower price on its own site than on Booking.

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Disparity

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Direct booking

A direct booking is one the guest makes through the hotel's own channels, with no middleman. It saves the OTA...

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OTA

An online travel agency is a channel that sells accommodation and travel online in exchange for a commission....

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Agency model

In the agency model, the guest pays at the hotel and the hotel later settles the commission with the OTA. The...

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FAQ

What is Rate parity?
Rate parity is the practice of a hotel offering the same public price for the same room type and date across all sales channels, such as its own website, Booking, or Expedia. Many OTA contracts require this clause to prevent the hotel from undercutting them elsewhere.
How does Rate parity work?
It works through contractual agreements where the hotel promises not to publish lower rates on any other channel, including its direct site. If a hotel spots a cheaper rate on a competitor channel, it must raise its own price or face penalties.
What is Rate parity used for?
It is used to protect OTAs from unfair competition by ensuring hotels cannot offer hidden discounts on direct sales that would undermine the commission OTAs earn. However, it restricts the hotel's freedom to reward direct bookers, making it a controversial topic in the industry.

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