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Well, in my opinion rate parity agreements should be illegal in the first place, as they foster rent seeking behaviour as opposed to fair competition. And if a

Well, in my opinion rate parity agreements should be illegal in the first place, as they foster rent seeking behaviour as opposed to fair competition. And if a few large chains drop out of these household names and welcome all small hotels to their coop with fair terms, I fail to see how that would be NPV negative move even if it took a couple of months to readjust for SEO. Price fixing? Just found a couple of competing coops with different seed chains.

pydry 6y ago
This mirrors the clauses VISA/MasterCard have that say that shops can't charge different prices for credit cards and cash which also solidifies rent seeking behavior. I wonder if you could create a similar law for both.
- bluecalm 6y ago
  This one is very frustrating. If anything it should be obligatory to make payment processor fee to be a separate item. This way we would have fair competition with consumers choosing the cheapest/most convenient option.
  - oarsinsync 6y ago
    Airlines such as Ryanair in Europe do this. One of the regulations that airlines in europe are required to adhere to is that they're not allowed to advertise up-front prices that come with additional non-optional fees. So the ticket price advertised up front has to include all mandatory fees and taxes. Optional fees (hand luggage now being the latest, priority boarding, checked luggage) can be extra. Payment processor fees cannot be extra. At least one needs to be free. So in reality, it's not necessarily the cheapest processor that's free, but it's the least popular one that's free. That way, for all the common ones, you can now charge a fee and tick the regulatory box, while still screwing your customers out of more money. E.g. Visa Electron is free, Visa Debit/Credit, Mastercard debit/credit and Amex all come with fees to use.
- beefield 6y ago
  Funniest is that nowadays card payments are likely cheaper to process for merchants than cash - if you account properly for all costs. So credit card companies should start lobbying to allow different pricing based on payment methods.
  - lorenzhs 6y ago
    If you're a large retailer and have been able to negotiate good rates with a payment processor and are in a country where interchange fees are capped (e.g., EU countries), then I can see it. But I doubt that it's the case in the US where those fees have to fund 2% cashback programmes etc.
    - beefield 6y ago
      Even for a small retailer, (i)zettle costs 1.75%[1] per transaction. No monthly fees. I honestly can't see how cash can compete with that. You need to spend time managing your change. You need to have some kind of register. You need to take your cash to the bank (which is far from free, and takes time). You need to manage your operations so that nobody steals or loses your money. Only "benefit" in cash is that tax avoidance may be easier, if you are into such things. If I'd start a small business, I would flat out refuse to take cash. (in Europe) [1] https://www.zettle.com/gb/help/articles/1084775-pricing https://www.zettle.com/gb/help/articles/1084775-pricing
      - moduspol 6y ago
        I think it's totally doable if you can avoid cash completely, but for most of the costs of handling it, they hit when you take your first dollar. If you're already buying a cash register, counting, making change, stocking cash/change, making a trip to the bank, etc., the incremental costs of additional cash transactions are minimal. Even with steps up for things like time-locked safes or pickups by armored cars. I agree with the sentiment, though. I guess realistically if it were my business, I'd need some significant evidence that I wouldn't be losing money by not accepting cash. That's the extraordinary claim, after all, with the vast majority of businesses doing it. I think I've seen a few food trucks in my area that don't take cash.
VBprogrammer 6y ago
Having worked for a company with a similar model, the problem with not having rate parity is that companies will then use your site for lead generation but encourage people to book directly. Also, the industry I was in had more transparent pricing than is typical in hotels so the client would often realise they had been made to pay extra for using the intermediary and leave bad reviews about the price discrepancy. So long as there is sufficient competition in the industry then I don't think it's in the consumer interest to ban rate parity.
- beefield 6y ago
  > companies will then use your site for lead generation but encourage people to book directly Of course. That would be the whole point. In that case the OTAs would need to start figuring out how to actually produce value to both end customers and hotels instead of just rent seeking.
  - VBprogrammer 6y ago
    I for one consider that being able to compare prices and availability across a large segment of the market to be consumer friendly behaviour. Additional fees for the privilege, not so much. Hotels are of course free to decline a business relationship with the various OTAs and traditional travel agencies for that matter. So long as no one OTA has a monopoly I don't think there is a problem.
    - beefield 6y ago
      > Additional fees for the privilege, not so much. But you understand that as the end customer, you end up paying the fees anyway, even if they are not visible in the bill? If your customers were unhappy about the extra cost, maybe you were not open enough about them or maybe the customer did not think your service worth the extra fee? After all, if the end customer is the one paying the fee, hotel has no incentive to try to get the customer past the OTA. They get the same money anyway.
      - 6y ago

pydry 6y ago

This mirrors the clauses VISA/MasterCard have that say that shops can't charge different prices for credit cards and cash which also solidifies rent seeking behavior. I wonder if you could create a similar law for both.

bluecalm 6y ago
This one is very frustrating. If anything it should be obligatory to make payment processor fee to be a separate item. This way we would have fair competition with consumers choosing the cheapest/most convenient option.
- oarsinsync 6y ago
  Airlines such as Ryanair in Europe do this. One of the regulations that airlines in europe are required to adhere to is that they're not allowed to advertise up-front prices that come with additional non-optional fees. So the ticket price advertised up front has to include all mandatory fees and taxes. Optional fees (hand luggage now being the latest, priority boarding, checked luggage) can be extra. Payment processor fees cannot be extra. At least one needs to be free. So in reality, it's not necessarily the cheapest processor that's free, but it's the least popular one that's free. That way, for all the common ones, you can now charge a fee and tick the regulatory box, while still screwing your customers out of more money. E.g. Visa Electron is free, Visa Debit/Credit, Mastercard debit/credit and Amex all come with fees to use.
beefield 6y ago
Funniest is that nowadays card payments are likely cheaper to process for merchants than cash - if you account properly for all costs. So credit card companies should start lobbying to allow different pricing based on payment methods.
- lorenzhs 6y ago
  If you're a large retailer and have been able to negotiate good rates with a payment processor and are in a country where interchange fees are capped (e.g., EU countries), then I can see it. But I doubt that it's the case in the US where those fees have to fund 2% cashback programmes etc.
  - beefield 6y ago
    Even for a small retailer, (i)zettle costs 1.75%[1] per transaction. No monthly fees. I honestly can't see how cash can compete with that. You need to spend time managing your change. You need to have some kind of register. You need to take your cash to the bank (which is far from free, and takes time). You need to manage your operations so that nobody steals or loses your money. Only "benefit" in cash is that tax avoidance may be easier, if you are into such things. If I'd start a small business, I would flat out refuse to take cash. (in Europe) [1] https://www.zettle.com/gb/help/articles/1084775-pricing https://www.zettle.com/gb/help/articles/1084775-pricing
    - moduspol 6y ago
      I think it's totally doable if you can avoid cash completely, but for most of the costs of handling it, they hit when you take your first dollar. If you're already buying a cash register, counting, making change, stocking cash/change, making a trip to the bank, etc., the incremental costs of additional cash transactions are minimal. Even with steps up for things like time-locked safes or pickups by armored cars. I agree with the sentiment, though. I guess realistically if it were my business, I'd need some significant evidence that I wouldn't be losing money by not accepting cash. That's the extraordinary claim, after all, with the vast majority of businesses doing it. I think I've seen a few food trucks in my area that don't take cash.

VBprogrammer 6y ago

Having worked for a company with a similar model, the problem with not having rate parity is that companies will then use your site for lead generation but encourage people to book directly. Also, the industry I was in had more transparent pricing than is typical in hotels so the client would often realise they had been made to pay extra for using the intermediary and leave bad reviews about the price discrepancy. So long as there is sufficient competition in the industry then I don't think it's in the consumer interest to ban rate parity.

beefield 6y ago
> companies will then use your site for lead generation but encourage people to book directly Of course. That would be the whole point. In that case the OTAs would need to start figuring out how to actually produce value to both end customers and hotels instead of just rent seeking.
- VBprogrammer 6y ago
  I for one consider that being able to compare prices and availability across a large segment of the market to be consumer friendly behaviour. Additional fees for the privilege, not so much. Hotels are of course free to decline a business relationship with the various OTAs and traditional travel agencies for that matter. So long as no one OTA has a monopoly I don't think there is a problem.
  - beefield 6y ago
    > Additional fees for the privilege, not so much. But you understand that as the end customer, you end up paying the fees anyway, even if they are not visible in the bill? If your customers were unhappy about the extra cost, maybe you were not open enough about them or maybe the customer did not think your service worth the extra fee? After all, if the end customer is the one paying the fee, hotel has no incentive to try to get the customer past the OTA. They get the same money anyway.
    - 6y ago