Are you ready for hotel sourcing season?
School’s out, the sun is shining. Summer is here—and so is the hotel sourcing season. Most of us have this purchasing highlight permanently inked on our calendar. And in years past, hotel sourcing pretty much meant ticking the boxes in a well-established (but very basic) process. But lately, things have changed. Let’s take a closer look at what’s new to better prepare you for the upcoming season.
Not too long ago, you solicited your targeted hotels, negotiated back and forth, and then published your hotel directory. Yes, it’s true, we had hotel programs in paper format, re-printed annually and stored on a shelf to collect a little dust until the next year. You might have referred to it a handful of times, and maybe even used it once during the year. (But did your travelers? Any of them?)
Thankfully, dust-collecting is no longer the hotel-sourcing default. You have more negotiation and partnership options with suppliers. You have more opportunities to interact with and influence your travelers. And that translates into more savings than ever before.
Here are some examples:
Negotiating corporate hotel rates
Previously: Compared to corporate rate or rack rate
• Corporate hotel rates or rack rates have become largely irrelevant as points of comparison. The Global Business Travel Association form no longer even asks for them.
• More creative—and realistic—comparison rates and benchmarks. Our Market Index allows you to compare bid rates to a market- based indicator, against economic factors so you get a solid projection on future savings.
• Dynamic pricing, where appropriate, is now part of many preferred hotel programs.
• When necessary, you can consider blending Last Room Availability (LRA) and Non-Last Room Availability (NLRA) rates to ensure coverage.
Previously: A “come one, come all” approach to maximize coverage
• These agreements still function as a safety net to address coverage gaps and availability issues, but they’re best applied more strategically.
• Know that hoteliers are approaching chain agreements more strategically. Whether it’s tiered discounts, share requirements, region- or brand-specific approaches, or competitor-limiting language, there’s more to consider than requesting (and getting) a simple discounted rate.
• Use chain agreements with a long-term eye toward supporting strategic meeting management.
Previously: Limited focus on breakfast, internet, and transportation as the must-haves
• These amenities are still important to most travel managers, and the short-term opportunity is to “not give anything back” from what has been negotiated over the past several years.
• But it’s important to identify and measure true negotiated amenity value as part of the sourcing process. For example, if breakfast is a must, are you tracking the savings associated with that amenity? Or are your efforts better spent driving down room rates and foregoing the bacon and eggs?
• Some hotels are moving high speed internet access to tiered pricing. But how do you know what bandwidth package will keep your travelers productive? Consider talking with your IT department to get a sense of data usage across your traveler population.
• Validate the amenities you’ve negotiated. Does the hotel stipulate those inclusions in the GDS (so that travelers are aware of them when they book)? Do your travelers actually get them at the hotel? Do they use them?
Previously: Viewable in the GDS (verified by a basic rate audit, conducted when the program was finalized)
• Travelers are using a wider array of booking channels. So you need to ensure visibility across multiple channels while still driving compliance to preferred hotels.
• At a minimum, the best programs spread out their basic audits to monitor GDS loading across multiple seasons.
• Consider monitoring rate availability at various points along the trip timeline:
o Pre-booking: a k a the standard audit, which ensures the rate is actually loaded in the GDS
o Post-booking/pre-trip: evaluates whether the negotiated rate (or better still, a lower non-qualified rate) has become available, if the traveler booked a rate equal to, or higher than, the negotiated offering
o Post-trip: compares the actual consumed rate with the negotiated rate
• While some of these audits may seem reactive, in the long term, they’ll drive behavior change and to capture critical savings when possible.
Integrated Travel & Meetings
Previously: Encourage your meeting planners to use preferred transient properties
• This is now part of broader initiatives to blend a strategic meetings management program with the transient program.
• The GBTA RFP allows a travel manager to request small meeting rates and additional details related to pre-sourcing those meetings.
• This model allows for more efficient planning and minimizes time spent negotiating with hotel properties.
• It promotes a partnership with hotel suppliers and meeting planners.
What was once a fairly simple process has expanded in scope for the progressive travel manager. You have more options to influence travelers, improve satisfaction and maximize your spend. Corporate hotel programs that embrace these changes—and the flexibility they require— will see positive results.