What is the goal of rate parity?

Question

BlackTom AI · Accepted Answer

First, let’s restate the question and options to orient the discussion: What is the goal of rate parity?
Option 1: To ensure a hotel’s room rates match those of the hotels in its comp set. This sounds like competitive benchmarking, but rate parity specifically refers to consistency across booking channels rather than matching peers’ prices, so this is not the core definition.
Option 2: To charge the same price for the same room regardless of booking channel. This directly captures the essence of rate parity: price consistency for the same product across different channels (e.g., direct website, OTAs, call center), preventing channel-based price discrimination.
Option 3: To make differences in price between room types seem justified to guests. Rate parity is about equal pricing for the same room, not about justifying price gaps between different room types; in fact, parity typically targets the same room across channels, not revenue-management-imposed gaps between room categories.
Option 4: To create an effective pricing strategy as part of positioning the hotel. While pricing strategy and positioning are related, rate parity is a specific constraint about channel-consistent pricing for identical rooms, not a broad statement about overall pricing strategy or positioning.
Delving into each point, we see that the concept central to rate parity is consistent pricing across booking avenues for the same product. The other options mix in ideas like competitive matching, price discrimination by channel, or broader positioning strategies, which are not the defining feature of rate parity.
In more detail, Option 1 proposes mirroring competitors, which is a market comparison activity, not the parity rule that prices must be equal across channels for identical inventory. Option 3 implies creating perceived justification for price differences between room types, which contradicts the parity goal since parity targets sameness for the same room, not variability across room categories. Option 4 suggests a broader strategic aim, which is important in revenue management but does not capture the specific constraint of channel-based price equality that rate parity enforces. Option 2 precisely states the requirement that the same room should carry the same price regardless of how it is booked, which aligns with the standard definition of rate parity in hotel revenue management.
In summary, the only option that accurately reflects the specific objective of rate parity is the one asserting identical pricing for the same room across all booking channels, while the others describe related concepts that are not the rate parity constraint.

BUS-480-01 Quiz 10 (Ch. 10)

What is the goal of rate parity?

View Explanation

Log in for full answers

Similar Questions

In a consumer society, many adults channel creativity into buying things

Economic stress and unpredictable times have resulted in a booming industry for self-help products

People born without creativity never can develop it

A product has a selling price of $20, a contribution margin ratio of 40% and fixed cost of $120,000. To make a profit of $30,000. The number of units that must be sold is: Type the number without $ and a comma. Eg: 20000

Which of the following statement regarding cost is correct:

Under the assumptions used in cost-volume-profit analysis, as the activity increases:

The CVP and break-even analysis are supported by a range of important assumptions. Which of the following is not an assumption of the CVP:

The break-even point is that at which:

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler