From revenue management pricing to hotel brand dilution: the case of rate disparity across online distribution channels

Purpose This study investigates the drivers of hotel rate parity enforcement and the magnitude of rate disparity across online channels. It specifically evaluates how brand affiliation, hotel tier and destination-specific contexts shape pricing consistency and impact brand integrity in the global marketplace. Design/methodology/approach Using rate data from 900 hotels across 30 global destinations this study introduces the Rate Disparity Index (RDI) to quantify inconsistencies. Methodologically, a directed acyclic graph (DAG) ensured rigorous variable selection, while multilevel modeling (logistic and linear) accounted for nested hotel and destination-level factors. Findings The study empirically demonstrates how brand integrity concerns and hotel tier significantly influence the consistency of pricing practices. Additionally, the analysis highlights that destination-specific contextual factors play a crucial moderating role in shaping the enforcement and effectiveness of rate parity policies across different global markets. Research limitations/implications The study validates RDI as a robust tool for monitoring price consistency. It reveals that chain affiliation provides superior control over algorithmic pricing compared to independent hotels. For practitioners, the findings advocate for real-time rate shopping and selective distribution audits to rectify unauthorized online travel agency discounting and protect brand integrity in a complex digital ecosystem. Originality/value This study’s originality is the introduction of the RDI, a novel metric for quantifying cross-channel pricing inconsistency. Methodologically, the rigorous application of a DAG for robust variable selection enhances design integrity and robustness of results. These frameworks provide a unique toolkit for academics and practitioners to systematically evaluating pricing strategies and their specific impact on hotel brand equity.