Wholesale rates, whether static or dynamic, are a crucial part of a hotel's overall revenue management strategy. They help in filling rooms and ensuring a base level of occupancy. When rates accidentally show up on Online Travel Agency (OTA) and Meta Search Engine (MSE) channels, however, it can lead to hoteliers being undercut on the prices offered through their direct channels.

This was a main theme at HEDNA Bangkok 2024, held from September 23 to 24, where global industry leaders gathered to discuss the future of hospitality distribution in the Asia-Pacific region. In a panel on wholesale rate distribution moderated by Head of Rocket Travel by Agoda Damien Pfirsch, Dusit Hotels & Resorts’ Nichlas Maratos and Jumeirah’s Sascha Seefried explored how hoteliers can achieve transparency with rate distribution, the challenges and opportunities of transitioning to dynamic rates, and the future outlook for wholesale rates.

Wholesale rates are integral to Dusit Hotels & Resorts, where resorts are a key part of their portfolio – though Maratos emphasizes the need to adapt to different markets and evolve to a more dynamic solution. For Jumeirah, which caters to markets like the UK and Germany that prefer travel agents, wholesale also remains important. 

The problem is not with the wholesale rate itself but with its distribution. That’s why the Rocket Travel by Agoda team built a system that delivers the transparency hoteliers need, so they can manage their rates, optimize performance, and fuel growth.

With effective wholesale rate management, such as through a chain wholesale platform, hoteliers may find it easier to transition to dynamic rates. Dynamic rates are flexible pricing that can change in real-time based on market demand, competition, and other factors, while static rates are fixed pricing agreements that do not change over a set period, often used in traditional contracts with travel agents and tour operators. 

Hotels may choose between static and dynamic wholesale rates based on market conditions, consumer preferences, and the competitive landscape. Payment is an issue with static rates, as they require significant resources to chase payments. By going dynamic, hotels can achieve better cash flow with instant payments processed by virtual credit cards. Yet the choice between static and dynamic rates can affect relationships with partners, with dynamic rates sometimes requiring renegotiation of terms and investment in technology. 

For Dusit, it's all about going dynamic, as these rates allow hotels to respond quickly to market changes and optimize revenue. Different markets can progress at different speeds. Jumeirah is also on the same path, having embarked on a mission three years ago to eliminate all static contracts. They invested in technology to distribute to a broad range of partners and are now 95% dynamic, with a goal to be 100% dynamic by 2025, building their own in-house solution to create dynamic rates.

While wholesale rates will remain a cornerstone of revenue strategies, the shift toward dynamic pricing is reshaping how hotels approach market adaptation and revenue optimization.

Seefried emphasizes that mindset and education are crucial. Hotels that have relied on static rates for decades may find it challenging to embrace change, fearing the loss of control over pricing and increased complexity. However, educating them on the benefits of dynamic rates can ease the transition. Seefried notes that Jumeirah's bold stance has led to partners eventually agreeing to invest in technology to integrate dynamic rates. 

The future of wholesale rates involves adaptation and technological investment. While static rates may eventually disappear, wholesale as a rate type still holds value. A chain wholesale partner can be a key component to successfully providing wholesale rates in a consolidated distribution platform. Dynamic rate management systems empower hoteliers to optimize pricing strategies, regain control over their distribution, and gain transparency into where their rates are listed, significantly growing revenues by accessing new partners and reducing dependency on large historical partners. 

Learn more about chain wholesale distribution solutions and how hoteliers and chains can benefit from a partner with unmatched reach and best-in-class technology.