Hotel Distribution & Rate Parity Glossary
Plain-English definitions of the terms independent hoteliers run into when dealing with OTAs and rate parity.
Rate Parity
The principle that a hotel room is sold at the same price across all distribution channels — the hotel's own website, OTAs like Booking.com and Expedia, and other channels — for the same room type, dates, and conditions. Full guide →
Rate Disparity
A violation of rate parity: the same room is priced differently across channels. In practice this usually means an OTA is selling your room cheaper than your own direct rate, often via member discounts you didn't fully authorize.
OTA (Online Travel Agency)
A third-party website like Booking.com, Expedia, or Hotels.com that sells hotel rooms in exchange for a commission — typically 15-25% per booking. Great for reach, expensive for margin.
Wide Rate Parity
A contract clause requiring the hotel not to undercut the OTA on any channel, including its own website. Banned across the EU under the Digital Markets Act (2024) and earlier national laws. EU rules explained →
Narrow Rate Parity
A clause that lets the hotel offer lower prices on offline and loyalty channels but not on its public website. Also banned for gatekeeper OTAs in the EU.
RevPAR
Revenue Per Available Room — total room revenue divided by available rooms. The headline metric that combines both rate and occupancy. Rate disparity erodes RevPAR by pushing bookings to commission-heavy channels.
Genius
Booking.com's loyalty program offering 10-20% member discounts. A leading cause of rate disparity: logged-in Genius members see prices below your public direct rate, so checking your own listing logged-out hides the problem.
Wholesale Leakage
When rooms sold to wholesalers (Hotelbeds, WebBeds) at net rates get repackaged and resold on OTAs below your public price. The hardest disparity type to track and dispute.
Direct Booking
A reservation made directly through the hotel's own website or front desk — no OTA commission. Protecting direct bookings is the entire point of monitoring rate parity.
Channel Manager
Software that distributes your room inventory and rates across multiple OTAs and your booking engine from one dashboard, keeping availability in sync. Examples: Cloudbeds, SiteMinder, Mews.
Best Available Rate (BAR)
The lowest non-restricted, publicly available rate you offer for a given date — the benchmark used for parity comparisons.
Rate Shopping
Monitoring competitor and OTA prices to inform pricing. Rate parity monitoring is a focused form of rate shopping aimed specifically at catching violations of your own pricing. Competitor tracking →
Compset (Competitive Set)
The group of nearby hotels you compete with directly for the same guests — your benchmark for pricing and performance. Usually 3-5 hotels of similar location, star rating, and segment. Tracking your compset's prices reveals when to raise your own rates. How to track competitors →
Know the terms? Now catch the violations.
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