Simon Calder: Hoteliers just have to learn to trust in

Every enterprise likes to brag that you will never find a lower price

Share
Related Topics

Every day millions of individual elements of inventory – airline seats, rental cars, hotel beds – are matched with millions of consumers online. In the 15 years since the first tentative steps were taken to sell travel via the internet, the distribution dimension of the industry – getting bums on seats and heads on beds – has been transformed. What was an inefficient, cost-laden mechanism is now fairly close to the economists' mythical perfect market.

Parts of the hotel business have not yet fully bought into the idea that the market will decide prices – and bizarrely, this is largely due to the internet and the travel-booking websites that generally do consumers such favours. Every enterprise likes to brag that you will never find a lower price, not least because it is commercially convenient for them if you don't bother shopping around. "Rate parity," the practice of setting a floor in prices below which no one can stray, is an easy way to protect a price promise.

In the alleged unsavoury practice of making deals with travel agents to limit price cutting, there are echoes of the bad old days of aviation in the 1970s, when the airlines openly fixed fares between themselves. The refreshing difference is that, 40 years ago, the government actively supported the cartels and penalised price cutting. This Office of Fair Trading investigation is on the side of the consumer.

Life for everyone in the travel industry is tough. Hotels and airlines have high fixed costs, low marginal costs and the remorseless perishability of stock: the tens of thousands of bed nights that went unsold in London last night are gone forever. But hoteliers should embrace the market. The dark art of filling as many beds as possible at the highest rate is best conducted by allowing the free market to flourish, rather than stifling competition.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

SEN Teaching Assistant Runcorn

£50 per day: Randstad Education Cheshire: SEN Teaching Assistant EBD , Septemb...

English Teacher

£110 - £130 per day: Randstad Education Preston: The Job ? This is a new post...

Primary Teacher EYFS, KS1 and KS2

£85 - £130 per day: Randstad Education Preston: Randstad Education are urgentl...

Teacher

£85 - £140 per day: Randstad Education Preston: Rapidly developing and growing...

Day In a Page

Read Next
 

The EU must take more responsibility for the migrants risking their lives to reach Italy

Benjamin Ward
The view from Arthur's Seat, Edinburgh  

Scottish independence: Why I can't wait to leave London and live in a free, independent Scotland

Yannis Baboulias
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week