"For general grouping of OTAs, there are three basic models OTAs can work with hotels, outlined below.

• Merchant: The OTA collects payment from the customer directly, and the hotel receives the net rate after the intermediary is compensated, based on the pre-negotiated deal. The hotel records the net room rate.
  • Agency: The hotel collects payment directly from the customer, and the intermediary (the OTA) is compensated after, based on the pre-negotiated deal. The hotel records the gross or total room rate.

• • Opaque: In the bidding method, the customer does not know the hotel until after the sale. The hotel receives a pre-negotiated rate, and the OTA keeps the difference between what the guest pays and the pre-negotiated room rate.

respond briefly the following.

Questions to Consider:

• What are the impacts to a hotel when they record the net rate (merchant model) or the gross rate (agency model)?
• Define rate parity.
• Do you think rate parity is important to a hotel's success?"