Corporate Clients Not Always Receiving Preferred Hotel Rates
As hotels seek to increase profits, they have come up with smarter strategies and techniques that can negatively impact the budgets of corporate travelers. This could ultimately hurt the relationships they’ve built with their corporate clients
What’s been trending is business travelers are increasingly challenged to find and secure accommodations at their preferred rate, because hotels are manipulating their inventory in defining what a ‘standard room’ is, thereby limiting availability. This issue even comes up when corporate clients have contracts that specify last-room availability on a standard room.
In order for hotels to create the perception they meet the standards of their corporate contracts, they offer greater availability during off-peak periods of travel. However, once high season hits, availability becomes severely limited. When the demand is high, business travelers’ ability to secure their preferred rates is quite limited. In this manner, hotels are able to manipulate higher pricing when demand is high.
These tactics were introduced on the consumer side of the hotel business years ago. Now they are emerging on the corporate side as well. What can corporate travelers do to keep up with the technology-enabled, demand-driven pricing techniques the hotel industry is using? To ensure the pricing corporate travelers need and expect, contracts with frequented hotels should include negotiated rates that are offered in conjunction with chainwide deals, best-price-on-day purchasing, dynamic pricing, and audits to name a few. These strategies will maximize travel cost savings and program success.
When preferred rates are higher than best-available rates, there certainly is a problem. Specifying the wording on corporate hotel contracts to restrict the scope of yield-management tactics is a great start. Executing a rate-assurance program, which automatically re-books a room if a better rate becomes available, is another step in the direction to creating a solution for corporate clients.
For more information on managing your hotel’s spend, contact one of TravelStore’s Client Service Managers.