Identifying undercutting, tracing its sources, taking countermeasures: this is how hotels protect their pricing strategy across all distribution channels.

The hotel industry depends on a consistent pricing strategy – because prices directly influence demand, brand perception, and profitability. Yet this structure is increasingly undermined by promotions, undercutting, member discounts, and opaque affiliate programs.

At the core lies rate integrity – a uniform price display across all distribution channels. Closely linked is rate parity, which means offering the same price for a room across all booking platforms. Both principles are central to building trust and ensuring fair market conditions. However, when inconsistent prices appear, they create confusion, loss of trust – and, in the worst case, reputational damage.

What Causes Undercutting?

A common trigger is so-called undercutting: rates are offered below the official prices – either by OTAs or unintentionally by the hotel itself. Many platforms exploit contractual loopholes, promotional mechanisms, or B2B reseller networks to display prices below the direct booking rate.

• Decline in direct bookings
  Guests choose cheaper OTA offers instead of booking on the hotel’s official website – which increases commission costs.
• Weakened brand image
  Repeated undercutting positions the hotel as a price-sensitive product and undermines long-term brand value.
• Loss of guest trust
  Inconsistent pricing across different channels confuses customers and can negatively impact loyalty.

A frequent example of such pricing violations is Agoda – an OTA owned by Booking Holdings Group but operating with a separate, partly non-transparent business model. Agoda sells hotel rooms not only directly to end customers but also via B2B channels, unintentionally giving other providers access to inventory. Several mechanisms play a role here:

• Wholesaler Rates
  Agoda – like other OTAs – accesses rates originally intended for B2B distribution (e.g., package tours or closed-user groups). However, these are made public – either directly or through B2B partners such as Prestigia, Getaroom, SnapTravel, Zenhotels, Trip.com, HotelsClick, Amoma (defunct), or Hotelbeds/Bedsonline, unless closely monitored.
• Merchant Models
  Unlike the traditional agency model, OTAs like Agoda, Trip.com, or Travco purchase allotments in advance and resell them independently. They often set the final prices themselves – including below parity.
• Geo-Pricing / Cross-Market Rates
  Some platforms deliberately display regional special rates (e.g., “Asia-only” rates) that become visible via geo-targeting, VPNs, or specific currencies – often labeled as “mobile rates” or “private deals.” Nevertheless, these can still appear worldwide through metas like Google, Trivago, or Tripadvisor.
• Reselling via Sub-OTAs
  Even if a hotel has no contract with Agoda or Trip.com, sub-OTAs or affiliate networks can still distribute rates – for example, via price comparison sites or meta platforms. Bookings via Telegram groups, WeChat, or other niche markets also fall into this category.

But what concrete actions can hotels take when rate violations are identified on metasearch platforms or in rate shopper tools – especially from providers with whom they have no direct contract?

This is where strategic revenue and distribution management comes in.

If you need support in implementing appropriate countermeasures, analyzing your current distribution strategy, or considering a strategic realignment – for example, without wholesaler contracts – JF Hospitality is here to help.

Whether through micro-consulting, targeted audits, or holistic revenue & distribution consulting, we will help you find the optimal solution for your property.

Learn more at www.jf-hospitality.de/en.