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World Parity Monitor: Europe gains pricing control as hotels tackle rate parity

Paris
Paris exceeds 67.3% with the best direct rates followed by Lisbon (66.56%).

European market ahead of Asia and Americas as hotels up their game on price parity. While 3-star outperform 5-star properties, Eurostars see its performance leap in a year. 123Compare’s data (October 2024 World Parity Monitor) shows who is winning the hotel rate parity race.

BARCELONA – The European hotel market is leading in price parity by outperforming OTAs and Metasearch engines with more aggressive pricing, according to the October 2024 World Parity Monitor by 123Compare.me, giving hotels real-time control of their pricing distribution strategy.

Compared to Asia and America hotel markets, Europe improved its pricing during “Peak” season* – between October 2023 and October 2024 – with over 48% of direct rates better than third party channels. This marks an upturn in success compared to 2023 when hotel rates were only achieving better rates than OTAs in the “Somewhat Busy” and “Not Busy” seasons.

The ranking of top-performing cities worldwide in October 2024 is also owned by Europe with Paris exceeding 67.3% with the best direct rates followed by Lisbon (66.56%).

Top Performing Cities Worldwide October 2024:

  1. Paris (67.35%)
  2. Lisbon (66.56)
  3. Palma de Mallorca (66.02%)
  4. Barcelona (62.22%)
  5. Venice (61.91%)

While at the other end of the spectrum, Macau, Las Vegas and Zurich have experienced increased competition from OTAs this year, with properties in Ho Chi Minh City losing 54.8% of rates to OTAs, consistent with 2023. New cities like Rio de Janeiro and Vancouver have joined the list of locations losing out to third party channels.

Global brands have doubled-down on pricing strategies with visible changes in price parity performance for leading hotel groups. By October 2024, Eurostars took the lead by improving rate distribution securing the best room rate for direct bookings, up 39% percentage points from 40.1% (2023) to 78.8%, followed by Choice Hotels (49.9%) and Millennium Hotels and Resorts (46.1%). Meanwhile, Radisson Hotel Group (RHG) demonstrated the strongest rate parity among the chains, with 44.5% of rates matching third party channels. In contrast, IHG pricing controls slipped from 2023, with better rates available across OTAs than direct in 2024.

chart

“Our data shows patterns changing in the EU where more hotels are winning the war on rates during peak and non-busy periods,” surmised Jordi Serra, CEO founder, 123Compare. “The difference emerging between Europe and the rest of the world illustrates the importance of strong revenue policies, where less sophisticated markets give better rates to third party channels.”

“Over the last six months particularly, we believe that DMA [Digital Marketing Act] regulation in the EU has impacted pricing by giving hotels more opportunities to beat OTAs on rates. We also see a distinct pattern that OTAs ‘strategic’ or aggressive behaviour is in the mainstream or “default” searches – where there is more traffic.”

“From the increased performance in rate parity, the large hotel chains appear to be more focused on controlling their prices. Therefore, they have been reducing disparities across third-party channels – which we see reflected in more equal price distribution where price parity is higher – while improving tactics for stronger direct rates.”

OTA Booking.com dominates the market, appearing in over 90% of offers, despite hotels’ direct prices beating Booking.com’s rates 47.4% of the time. This strong presence makes it the number one channel.

 

*Google’s Seasons defined

The report uses seasonal definitions by Google to measure the seasons in terms of how busy the destination is throughout the year in each destination. These are defined as

  • Not busy season – a quiet time with low demand, sometimes referred to as the off season.
  • Somewhat busy season – a quieter period than busy season but still a relatively low demand.
  • Busy Season: While also a high-demand period, the “busy season” is a notch below the peak. It represents periods with steady, strong demand but without the extreme spikes seen during peak season.
  • Peak Season – This refers to the absolute highest-demand periods, typically during major holidays, festivals, or vacation times when travel demand is at its maximum.
Theodore Koumelis
Co-Founder & Managing Director - Travel Media Applications | Website | + Posts

Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.

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