Why is it so important for a five star hotel to maintain the parity rate? The rate is one of the main means, maybe the primary mean, a hotel employs to communicate with the market.
The parity rate expresses three fundamental qualities. That is to say, credibility, certainty, clarity. These qualities represent the necessary condition for business to survive and thrive.
On the contrary, disparity rate implies non-credibility, uncertainty, unclarity. Hence, compulsory market exit.
First, maintaining the same rate level on different sale channels means that each partner is treated equally.
Second, it means that the hotel is itself sure about the real value of it services. By communicating certainty, market perceives certainty; so that potential buyers and guests and will be likely keen to book a stay.
This is all the more true for the luxury market. Think about a Apple computer or phone. We are talking about a mass consumption brand, which nonetheless employs luxury market price strategies.
We all know that the price of a Macbook is the same on whatever national market and in whatever branded or non-branded, on-line or physical store.
What would we think if we found a rather cheap Macbook? We most certainly think that this cheap Macbook is a fake and the salesperson is trying to deceive us.
As the example shows, certainty and clarity implies credibility. The same goes for hotel rooms and suites.
Finding different rates on different channels might discourage a potential guest from booking to the extent that he/she might quit the purchasing process.
All this implies that a revenue manager must always be in control of the room rates being sold via the different channels through which he/she is acting. And that he/she must always know exactly what the rate levels are per room category throughout the all season/year.
This also means that such market actors as wholesalers and B2Cs need to be excluded, because of their cut and downselling policies.
Losing control of the rates entails losses in terms of credibility on the market. Hence loss in terms of revenue and reputation.
Antonio Desiderio