France the second country to ban rate parity after Germany has taken the decision that all hoteliers where waiting, to bring the rate parity to an end. But what will this imply in term of the application and what will this mean for hoteliers in term of the application or will this imply that it will move in to a pricing war?
The French national assembly adopted a new bill that will reshuffle the cards on how Booking.com and Expedia partner with hotels.
The bill called “Macron bill” – named after French Minister of the Economy Emmanuel Macron – prohibits OTAs from including any parity clauses at all in their agreements with hotels, and gives hoteliers the full pricing freedom – including offering lower rates on their own websites.
From a hotelier perspective this means that new agreements between OTAs and hotels will have to be formulated in a way that allow hotels to offer lower rates in any of their sales channels, including their own website. What’s more, the bill also prohibits OTAs to offer lower rates as those provided by the hotel, giving hotels full pricing control within their contracted distribution channels.
Carlo Olejniczak, director Booking.com for France, Spain and Portugal, told AFP (Google Translate version) that the new bill will result in intensified pricing wars between OTAs and hotels, as Booking.com remains committed to its “best price guarantee.”
Roland HEGUY, President of HOTREC’s French member association UMIH “It is a real revolution that is underway for the French hotel industry and for our customers. After the decision of the Competition Authority, this vote will contribute to the establishment of a renovated contractual framework to restore conditions of a commercial relationship based on trust between hotels and booking sites in the interest of consumer”.
Quoted in hospitalityInside.com (by subscription only), Booking.com’s Managing Director EMEA said that in a world without rate parity many independent hotels in France will not be able to compete with the major hotel brands and search engines, and this will have a negative effect for tourism to France as a whole.
The main problematic with rate parity will be the application as chain hotels will need to make a major change in their technologies and this will also affect their global contracts as this new policies don’t apply worldwide. For smaller independent hotels that don’t manage their distribution proactively this will mean not much as they will not be able to enforce this or control it as it requires a lot of work and knowhow to manage their channels.
Furthermore the new regulation may be effective for hotels whose source market is France but for hotel with source market coming from Asia and Americas and other European market this may mean not much of a change as OTA as already playing with rates in the source markets.
While OTA won’t have a contractual right to prevent hotels to give them better rates, it should still have strong commercial leverage to punish hotels that are giving better rates to other sites. This should drive greater price disparity across channels, which will encourage consumers to comparison-shop more than ever
A PhoCusWright study commissioned by Akamai Technologies, Inc. found that travelers expect quick page load times for travel websites, and that active loyalty program members are more likely to have certain key negative reactions to technical issues. The study found that 57 percent of online shoppers will wait three seconds or less before abandoning the site. Younger travelers are less patient. Generation Y and younger travelers are less patient than older travelers when it comes to page load times. Sixty-five percent of 18 to 24 year olds expect a site to load in two seconds or less. A third of travelers would be less likely to visit a site after experiencing technical problems like slowness or errors on the page. Business travelers are slightly more likely to have a negative reaction. Travelers tend to be multi-taskers, with 59 percent of consumers doing something else when waiting for a travel website to load. Nearly one in five (19 percent) open another travel site in a new window when made to wait. Hidden fees may cost you, as 43 percent of online shoppers have abandoned a booking because the final product price and/or fees were higher than they were willing to pay.
The study found that that many travelers are guided by their previous experiences with a particular website, and for just over a third of consumers (34 percent), a technical glitch will lower their likelihood to visit a site again. Business travelers and loyalty program members are less tolerant of technical problems, and are slightly more likely to have a negative reaction to them. Research shows that these groups of online shoppers are also the most valuable customers for online travel sites. Thus, the stakes for site performance and streamlined, transparent transactions are even higher for companies targeting these segments.
In addition, findings state that consumers not only have varying patience levels, they also react to waiting differently. As with page loading times, the study finds significant differences when looking at results by different age groups. Younger travelers are more likely to engage in other activities, with 56 percent of 18 to 24 year olds waiting for loading compared to 77 percent of seniors. These results suggest that a poorly or slow-performing travel site can drive valuable shoppers away. One of the additional industry trends that PhoCusWright discovered during this project is that smartphone adoption among travelers will increase significantly in the next few years and will cross the halfway point among travelers in 2010. Consumers are still in the early stages of mobile usage for travel with 6 percent who uses mobile apps or sites when shopping for travel. For more information, visit http://www.akamai.com.
So is this the end of third party websites as Expedia, ebookers etc.., is Google taking over the online distribution channels? This may be a bit premature but at least we can say that Google is taking a big step towards dominating the market of information. For instance, they have integrated the quick flight search, which has already had a big impact on the flight industry.
In addition to this, Google has now integrated Google places for the hotel rates for all third party suppliers as ebookers, Expedia, lastminute, etc… and soon they will start distributing directly without passing through the third parties so they will monetize the hotel search with the same PPC model.
Nevertheless, we should not forget that Google is playing the double game, as third parties are their best customers so they need to play along with them.
What does this mean for the hotels? As Google has not deployed their deal to independent hotels, it doesn’t really mean much except if you are using Trust International as your CRS, in this case you can definitely start working with them as they are the only ones in the market to propose this services currently.
It should not take too long until their main competitor Micros will propose the same services. But what is more interesting is that in some destinations Google is giving this service to the individual hotel properties so they can access to the interface without passing by other suppliers. Soon we will be able to benefit from a new distribution channel without third parties with a smaller commission compared to the one of the third parties. The hotels themselves will be able to administer this new channel, which will rely on the quality of pictures and contents of the destinations. This will also be a perfect way of checking your rate parity as you will be next to the other third party sites.
Today, let me explain how to optimize your image SEO. First, you need to consider your alt text. An alt text it is the bit of information that allows the search engine to identify what is on your images, otherwise the search engine wouldn’t have a clue what you want to show and it wouldn’t be able to process the information. The second consideration is the image name, as in most cases the name that is left by your camera doesn’t say anything about the content of the picture.
For instance, the image name “nk0012.jpg” is definitely not going to help the search engine to find your hotel. You should rather use something like “hotel-mirador-lobby.jpg”. Just by updating this data you can improve your position in Google, which will bring you more customers and at the end of the day more revenues.
Here is a video of Matt Cutts that will help you understand.
And if you thought that this was not important, see what Google has just released: latest search tool Google Image that searches by images.