Europe gains pricing control as hotels tackle rate parity

123Compare’s data shows who is winning the hotel rate parity race

The European hotel market is leading in price parity by outperforming OTAs and Metasearch engines with more aggressive pricing, according to the World Parity Monitor by 123Compare.me, giving hotels real-time control of its 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 was Paris (67.35%) in first position, followed by Lisbon (66.56), Palma de Mallorca (66.02%), Barcelona (62.22%), and 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. 

“Our data shows patterns changing in the EU where more hotels are winning the war on rates during peak and non-busy periods,” said Jordi Serra, CEO and founder of 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, according to 123Compare.me.