Last week we learned more about important concepts in the area of Distribution and about the...

Last week we learned more about important concepts in the area of Distribution and about the job of Revenue Manager. Two of the most heavily negotiated points in the distribution channel agreements are Last Room Availability and Rate Parity. Which of these do you feel is the most beneficial to the hotel, and why?

Expert Solution

In case of the Last Room Availability (LRA), there is a mutual contract entered by the Hotels and the Agent, to be granted the room at a certain rate. Therefore, even if last room is available with the Hotel, the Hotel has an obligation to sell it only to that Agent as per the contracted terms and to that extent, there is a limited control of such a Hotel towards the decisions pertaining to the booking and price fluctuations. On the other side, in case of Rate Parity, the room rates shall remain same across all the Distributors or Agents who contract with the Hotel. The condition becomes concerning because whether it be on Hotel’s official website or through Online Travel Agencies (OTA), the room rates shall remain constant. The clients may choose to directly deal with the Hotels or to get it through the OTAs, as there shall be parity in rate. This may be burdensome for the Hotel because the Hotel shall need to pay a certain rate of commission to the OTAs from part of their revenues if the clients book it through OTA. Therefore higher the commission, lesser shall be the scope to earn high revenue on the part of the Hoteliers. The Hoteliers can only profit more when the clients directly deal with them.

Hence, I feel for the Hotel, Rate Parity may not be much beneficial owing to the uniformity in rates across all distribution channels but the burden of paying commission to the OTA thereupon from their revenues. In case of the LRA, it shall be hence beneficial for the rate as entered in the contract, shall remain unchanged and binding.

keosha answered 2 years ago

Although contracts are generally enforceable, last week we learned that there is an exception to this...

Although contracts are generally enforceable, last week we learned that there is an exception to this general rule. In particular, the law will protect minors from the enforcement of contracts that may not be in their best interests. As such, business may not be able to enforce contracts that they enter into with minors. Does this seem fair? From whose point of view?

This week we delved into the features of Access. We learned about importing and exporting data...

This week we delved into the features of Access. We learned about importing and exporting data to and from other applications. Please write your own scenario, either from a previous experience you have had or from your own imagination, where it was necessary to import and export data from one application to another in the Microsoft Office Suite.

This week we learned about the Foreign Corrupt Practices Act (FCPA). In that learning we saw...

This week we learned about the Foreign Corrupt Practices Act (FCPA). In that learning we saw that a key to reducing the penalty is through keeping books and records that are clean and transparent. Consider this case: A USA public company doing business in Freedonia (a made up name from another Marx Brothers movie!) is compelled to bribe local officials in order to be the first to receive a business license for a certain type of industry there. The competition...

This week we learned about stress and the toll it can take on us psychologically and...

This week we learned about stress and the toll it can take on us psychologically and physically. We discussed many strategies for alleviating this stress in healthy ways. In this week’s reflection, include how you believe that stress can impact your attitude and ability to persevere through your educational pursuits. From all the strategies presented by you and others throughout this week’s discussion, share how will you work to overcome the negative aspects of stress.

What you have learned about operations management? Why are the concepts important at home as well...

What you have learned about operations management? Why are the concepts important at home as well as at work? Is there anything you will apply that you have learned?

This week we learned about the increase in tobacco exposure illnesses. Knowing that tobacco exposure is...

This week we learned about the increase in tobacco exposure illnesses. Knowing that tobacco exposure is highly preventable, the government has already taken steps to attempt to decrease tobacco exposure. However, these measures have only been somewhat effective and we continue to see a rise in tobacco-related illness. Do you think that cigarettes and other tobacco products should be made illegal – or do you believe this infringes on individual rights? Be sure to support your stance. 2 APA citation

Corporations This week, we learned about the different types of corporations. Write an essay discussing the...

Corporations This week, we learned about the different types of corporations. Write an essay discussing the disadvantages and advantages of the various types of corporations. This essay should include information on corporations, S corporations and limited liability corporations.

Physician Payments: Relative Value Units Last week we learned the calculation of payments for physician services.P...

Physician Payments: Relative Value Units Last week we learned the calculation of payments for physician services.P RVU Information 2012: Code 44389 Work 3.13; PE (Non Facility) 8.4; PE (Facility) 1.91; MP 0.49 Code 58800 Work 4.66; PE (Non Facility) 4.12; PE (Facility) 3.56; MP 0.79 Code 13100 Work 3.17; PE (Non Facility) 5.56; PE (Facility) 3.28; MP 0.50 Conversion Factor $34.0376 GPCI Information. 2012: Work GPCI: 0.998 PE GPCI: 0.981 MP GPCI: 0.619 Code Description...

This week we have learned about four of the generally accepted accounting principles – revenue recognition,...

This week we have learned about four of the generally accepted accounting principles – revenue recognition, expense recognition, the matching principle, and the historical cost principle. Briefly explain what is meant by each of these and how they are applied to accrual accounting.

Let's practice what we learned this week about duty, breach, proximate cause, and, damages. These are...

Let's practice what we learned this week about duty, breach, proximate cause, and, damages. These are the elements of a medical malpractice case or any negligence case (for example, slipping on an old rotten tomato in the supermarket fruit aisle). 1. Tell us about malpractice or other negligence cases. 2. APPLY the 4 elements - discuss them in detail - duty, breach, proximate cause, and damages as they apply to your selected case.

Question