Rate parity is a contractual agreement between a hotel or B&B and its distribution agents that its room rates will remain the same across all booking platforms including the property’s website.

Rate parity is highly beneficial to online travel agents (OTAs) that have access to many travelers and charge commissions of 15-20% to property owners/operators. And remember, Bookings Holdings and Expedia Group own a majority of the travel booking sites.

There are two main types of rate parity:

1. Wide rate parity

With wide rate parity, a hotel or B&B agrees not to undercut the room prices that an OTA charges for their hotel. This agreement generally applies to all distribution channels.

2. Narrow rate parity

Narrow rate parity clauses allow hotels to offer lower rates than other OTAs, but not publicly through their own websites. With this type of rate parity, hotels can offer lower direct rates through indirect or offline channels such as travel clubs, email campaigns, and phone bookings.

The term Block Allotment is used in the Travel industry to designate a certain block of pre-negotiated rooms, Flights/seats, and rental cars that have been bought out and held by a third party such as a travel wholesaler, tour operator, travel agent, or Online Travel Agent such as Priceline, etc.

Allotments can be contracted with a tour operator or an OTA for a specific period such as a whole season, part of a season, or for any single date, and then resold to travel partners and final customers around the globe. A few days before guest arrival unsold flights, rooms, or rental cars may be released back to the supplier if such an agreement exists between the two parties. An allotment release back period is also negotiated as part of the allotment contract (e.g. four days before arrival). This frame of time is called the release period or cut-off date. Once this cutoff date occurs OTA’s no longer have that inventory available on its website until the new Block Allotment period goes into effect which is usually less than a day. In the transition from one Allottment Period to another, one OTA’s website may not have the same inventory available as another.

There are two types of rental car locations: Onsite and Offsite. Onsite airport locations pay considerable fees to be located on airport property, which are passed on to the consumer. Offsite locations do not pay fees, so this is reflected in the price you pay for the rental. Offsite locations do add another layer of complexity to your travels, as getting to and from the airport is your responsibility to arrange. Many offsite car rental agencies do not have shuttle services to and from airports.

There are 2 reasons this occurs:

1. As a private membership club, we are provided wholesale rates and are not subject to the hotel rate parity agreement. Whether intentional or an error, the hotel’s wholesale rate is set just a few points below its retail rate, which affects the rate posted on our booking platform. All public OTA’s are paid a +- 20% commission for bookings and this is part of the rate parity agreement. We and other private travel clubs operate on a 5%-10% markup over wholesale so if the wholesale rate is set just a few points below the retail rate, our markup can and does push our posted rate above retail, and therefore the Retail price is not posted.
2. On rare occasions, inventory block allocation affects that rate also. That particular room may be sold out in our allocation of rooms available, if so, we do not get the room at wholesale, you can still book it, but it will be at retail pricing.