This is the fourth part of an exclusive seven-part series that takes a look at how top cities in various regions have performed in terms of rate parity. The first six parts will look at trends in each of the below regions:

  • APAC
  • EUROPE
  • NORTH AMERICA
  • LATIN AMERICA (This Part)
  • MIDDLE EAST
  • OCEANIA

The last part of this series will feature an in-depth comparison between the performance of these 6 regions and a check on the impact if any of rate parity being abolished in France.

Part 3: RateGain’s Top Latin America Cities Parity Performance (August 2015)

Read part 1 (APAC) here – https://bit.ly/ParityinAsia

Read part 2 (Europe) here – https://bit.ly/ParityinEurope

Read part 3 (North America) here – https://bit.ly/ParityinNorthAmerica

According to the STR June 2015 YTD report, the south American region report an average increase of 0.20% in RevPAR compared to 7.2% in North America an 9.1% to the Caribbean. The occupancy levels declined by 3.3% to 58.5% compared to the same period (June YTD) last year. Overall, the Luxury class was the top performer, as ADR for the segment increased by 11.4% to USD235.74.

A look at the top 3 countries performance* (*Credit – STR Report)

  • Argentina recorded double-digit growth in ADR (+13.0% to ARS1,066.73) and RevPAR (+15.4% to ARS611.57). A high inflation rate has led to the increase in ADR, which has grown in year-over-year comparisons for 33 consecutive months. Buenos Aires mirrored this trend, recording a double-digit increase in RevPAR (+11.5% to ARS668.27) for the June year-to-date. This was driven by the increase in ADR (+9.2% to ARS1,150.32).
  • In June, Brazil reported decreases in the three key performance measurements: Occupancy (-6.8% to 57.3%), ADR (-36.3% to BRL276.53) and RevPAR (-40.6% to BRL158.49). Brazil’s performance reflects difficult-to-match comparisons from the same period in 2014, when the country hosted the FIFA World Cup. As a result, year-to-date results for Brazil shows a -14.2% decrease in RevPAR to BRL163.55.
  • Peru saw a 3.5% rise in Occupancy to 64.8% and double-digit increases for ADR (+11.4% to PEN450.19) and RevPAR (+15.3% to PEN291.53) for the June year-to-date.

The rate parity analysis for the 3-star segment in Argentina and Brazil clearly points toward both the countries being an OTA driven market with 79% and 76% of the rate being cheaper on the OTA sites respectively.  Similar story is depicted in the 4-star and 5-star segment with 58% and 56% of the hotels being cheaper on the OTA sites respectively.

Latin America rate parity at 29% is one of the lowest we have seen in this series marginally beating Europe(27%) and way behind Asia (60%) and the most disciplined North America (61%). Combine this highly competitive landscape with high inflation, currency instability in certain areas and decreasing RevPAR, ADR and Occupancy,  the hotels in Latin America have a huge challenge on hand.

The below chart further reveals that in fact hotels in Latin America face the most fierce competition from OTA’s in terms of not only rate parity but also in terms on price being the cheapest on OTA sites. Latin America fares the worst with only 13% (lowest among all regions below) hotels being cheaper on brand sites and 58% (highest among all regions below) of the hotels being cheapest on the OTA sites.

hotels in Latin America face the most fierce competition from OTAs

Key Highlights

  1. The performance of the Latin America region is pretty consistent across all three segments with 11%, 16% and 13% of hotels being cheaper on brand site across the 3-star, 4-star and 5-star category respectively while 59%, 58% and 57% of the hotels being cheaper on the OTA sites respectively. All other regions have a significant variance between the 3 categories.
  2. Lima seems to be most competitive in this region with only 6% of the hotels being cheaper on brand sites and 78% of the hotels being cheaper on OTA sites.
  3. Bogotá performs the worst with only 9% of the rates in parity.

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RateGain specializes in competitive price intelligence and price optimization solutions for hotels, online travel companies and airlines. It currently tracks more than one billion hotel rates every month across countries in US, Europe, Middle East, Asia and Latin America.

The above data is indicative in nature and RateGain can’t be held liable for its accuracy or usefulness for any purpose.