Are The Rate Wars coming

In our experience most hotels are unaware of the potential of a coming rate war, although there does seem to be evidence that the OTA's are well aware and are doing everything they can to lock in their customers. To our knowledge both Online Travel Agents involved have issued 'clarifications' as a result of the conclusion of the UK Office of Fair Trading' investigation into alleged Price Fixing in hotel prices.

Although only 2 OTA's were part of the investigation it would not be unreasonable to say that it put the process of Rate Parity across the whole industry under the microscope. Here is a section from one of the clarifications;
'OTAs may discount a property’s final retail price through closed user groups (only). The discount may not be offered on a guest’s first booking with the OTA'.

Because so many hotels are asking us about this We will attempt our own conclusion from the above; OTA's and crucially Hotels CAN offer lower rates IF it is a customers second booking. We expect the OTA's to be ramping up their systems to be offering better rates to repeat customers, and we expect Booking Engine Suppliers (like ourselves) to be rushing out systems that allow customers to see better rates on their second booking direct with the hotel.

It is not immediately clear to us what influence this will have on markets outside the UK

For people with a good attention span here is more information about the OFT ruling;

http://www.oft.gov.uk/shared_oft/ca-and-cartels/oft1514dec.pdf  

(Note - We are not experts on this subject and welcome any input from anyone that can correct or add anything to this topic)