Here are some of the stories that caught our attention over the week with some of our takeaways.
Geo-Based Hotel Pricing: A Bold Revenue Strategy or an Ethical Quagmire?: Henri Roelings the founder of Hospitality Net analyses the the discussions from their panel and says it has “reignited the debate over whether differentiating hotel pricing based on a traveller’s geographic location is a prudent revenue management strategy or an ethically fraught practice”.
This comes on the back of an article we had highlighted a few weeks ago in SFGate suggesting that several major OTAs appear to offer higher rates to users in more affluent regions—most notably the San Francisco Bay Area—compared to those in less affluent cities like Phoenix or Kansas City.
Those in favour see it as a logical step in revenue management, allowing hotels and OTAs to optimise profits by charging higher rates to customers in wealthier regions who are perceived to have a higher willingness to pay.
And that it is an extension of other common segmentation practices like corporate, group, or wholesale rates, targeting different segments with varying willingness to pay.
There is also the view that similar pricing strategies are common in other industries, such as fuel, airline fares, and insurance, where prices fluctuate based on location.
And last but not least that location is just one of many data points that can be used to personalise pricing, and as personalisation becomes more sophisticated, other factors like “past willingness and propensity to pay” will also influence pricing.
Some of the arguments against include questions about fairness and whether it constitutes price discrimination. Charging different prices based on location can be seen as discriminatory and unfair to customers.
And leave travellers feel exploited if they learn they are paying more solely due to their location, potentially leading to resentment toward both the OTA and the hotel. This can damage a hotel’s reputation and erode customer loyalty.
That it shows a lack of intrinsic value and that pricing strategies should reflect the intrinsic value of the hotel and service rather than rely on assumptions about wealth based on location.
Equally well-informed travellers or metasearch platforms may expose price discrepancies, leading customers to use VPNs or book from different regions to obtain cheaper rates.
Although rate parity clauses are being phased out or already removed in many European countries, parity clauses in many parts of the world including the US often dictate that the same publicly available rate must be offered across different channels, making geo-based pricing difficult to implement. However having said that, OTAs like Booking.com offer hotels the possibility to do geo targeted discounting – which seems to be the other way around!
And last but not least the worry of a public relations nightmare if bookers feel they are being gouged simply because of their location, they may share their experiences on social media and review platforms
I am very much of the view that while geo-based pricing may offer short-term revenue gains, it poses significant risks to long-term guest loyalty and hotel reputation. All for personalisation but not price gouging!
Who’s spending more and where they’re going in 2025: Web in Travel reports on Sabre’s overview of key trends shaping travel this year. The findings highlight how leisure travellers are planning, spending, and booking their trips – offering insights for travel providers looking to meet changing consumer expectations.
A few of these are in line with some of the other trend reports we have covered over the last few months including “Travelers from Asia Pacific are leading the way when it comes to 2025 travel plans, with a 34% increase in bookings for the year so far” and “Travellers are taking trips with extended family to spend quality time together ”
Cybersecurity wake-up call: New risks and vulnerabilities in hospitality: This article by Phocuswire presents a clear call for action and continuing vigilance by hotel companies as travel demand rises and with it the rise in cyber threats.
It refers to some of high-profile data breaches in recent years including that of Omni Hotels & Resorts with over 50 properties in the United States and Canada, that suffered a cyberattack forcing a system shutdown to protect and contain sensitive data, disrupting reservations, hotel room door locks and point-of-sale systems. And the article also says that a recent Hotel Management report found that 31% of hospitality organisations have experienced a data breach.
Hotel CEOs Banking on ‘Certainty’ for Corporate Travel Growth: Business Travel News reports “a mildly optimistic picture of the lodging industry in the coming years at the Americas Lodging and Investment Summit in Los Angeles this week, as top executives from some of the largest hotel companies in the world were bullish about expected deregulation and business confidence under a Trump administration but also expressed concern about the general unpredictability stemming from such policies as travel bans.”
Why All-Inclusive Resort Development Faces Challenges in Europe: Costar writes in Hotel News Resource that “despite the popularity and success of all-inclusive resorts in regions like the Caribbean, developing such resorts in Europe presents unique challenges, including regulatory issues, cultural differences and seasonality.”