How Will Social and Mobile Technology Influence Hotel Pricing?

The influences of social and mobile technology are increasingly pushing the hotel industry toward a more dynamic pricing model that is delivered in a one-to-one marketing fashion. However, OTAs still put pressure on hoteliers to stay in rate parity, there are several ways to boost your property’s sales without violating rate parity agreements.

Wendy Norris, corporate director of revenue and e-commerce of Valencia Group says: “We run into rate parity issues with all the OTAs and everybody else. Our hotel group doesn’t really play a lot with rates short-term, because of the rate parity issues. The OTAs will come and get very mad at us. You don’t want that [discounted] rate out to the public. You don’t want to hurt your rate integrity. If it’s on a public device, anyone can find it, and your competitors can also see what you’re doing. They’re watching you.” However, mobile booking channels’ rates would not be publicly published, so hotels can offer a cheaper rate without violating rate parity agreements.

FourSquare, an application that gives mobile users geolocational tips, check-ins and discounts, is another way to reach the consumer personally. When users check-in, you can offer them drinks, food or similar incentives and avoid the problems that come with changing room pricing.

Some other ways to avoid transgressing rate parity agreements are bundling packages or re-bundling value-added amenities within an offer. Jimmy Suh, SVP of e-Commerce Distribution for Loews Hotels & Resorts, suggests dynamic pricing driven by pyramid pricing, where the discount reflects the scope of a consumer’s social network. “Someone who has far more followers than another individual, we may throw out an added value to incentivize them to promote amongst their massive network and incorporate them into a greater loyalty program,” Suh said. “I think it’s just inevitable that the power of social media and how that impacts the brand will ultimately affect how we price our hotels.”

Would you consider implementing any of these pricing options at your property?


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