3 game-changing strategies to optimize your corporate hotel program for SMEs

Hotel program optimization is all about finding the right balance between cost control and traveler preferences.

A robust strategy involves a series of well thought out decisions about where your travelers stay, how much they will pay for hotel accommodations, and how to streamline the booking process. When it comes to optimizing a hotel program as a small- to medium-sized enterprise (SME), it’s critical to focus on creating a strong foundation. A successful strategy encompasses three key aspects: property selection, market segmentation and rate negotiation.

1. Determine the optimal number of properties for your hotel program

Sourcing the optimal number of preferred properties will result in a more competitive hotel program and help keep travelers booking within it. To start, you’ll want to assess the main factors influencing the number of properties in your program and evaluate the cost implication of adding or reducing properties. Consider the geographical locations where your organization has a significant presence or frequently sends travelers. A popular location gives you more negotiation power as you can guarantee the number of room nights. Evaluating the size and scope of your operations while considering traveler preference can also play a crucial role in the selection process.

Keep in mind that there isn’t a one-size-fits-all approach. Conduct a needs assessment based on these factors and evaluate existing contracts with hotel chains and properties to see where improvements can be made.

2. Segment your markets

Market segmentation is a fundamental part of the strategy to optimize your hotel program. By categorizing markets into different tiers, you can tailor your approach to meet the unique needs of each segment. It’s best to start by organizing your markets into three tiers. You’ll want to consider travel frequency to each market and evaluate the strategic value of each location in terms of partnerships, client relationships and the prominence of industry events.

• Tier 1 markets typically represent primary locations such as headquarter or sales locations with high travel volume. These are strategic destinations critical to your organization’s operations. Tier 1 markets may include premium hotels with extensive amenities, but this is dependent on your business needs.
• Tier 2 markets are also important but may not be as central to your organization’s activities as Tier 1 markets. These locations typically have lower travel volume but still play a significant role in your overall business. Properties in Tier 2 markets offer a balance between quality and cost-effectiveness.
• Tier 3 markets are often secondary or niche locations with lower travel frequency. While these destinations may not be critical to daily operations, they are still necessary for occasional business travel. Properties in Tier 3 markets provide cost-effective options without compromising quality.

After you’ve identified your top-tier markets, you can then prioritize allocating larger budgets to the properties in those locations.

2. Understand the use of various rates within your program

Once you have segmented your markets, it’s important to explore different types of rates such as your program’s negotiated rates, TMC negotatied rates and third-party content to understand the advantages and disadvantages of each one. This will help ensure you’re getting the best value in your program.

• Negotiated rate are pre-agreed rates between the organization and a hotel or hotel group. These rates are typically negotiated based on factors such as volume, length of stay, and overall business relationship. As well as the obvious cost savings, the advantage of these rates are that they can be tailored to specific needs and preferences of the organization, ensuring a customized accommodation experience for travelers. However, they can be limited in flexibility and restrictions such as minimum stay requirements.
• TMC negotiated rates often offer great discounts and benefits that can be used on their own or to supplement your negotiated program. Implementing these rates can help save you time and resources by avoiding sourcing in markets where you have little or no leverage. For example, BCD Travel’s Great Rates Hotel Program allows clients to take advantage of the discounts that BCD has negotiated with their hotel partners spanning over 50,000 properties.
• Third-party content is a fantastic addition to your client program. It helps drive consumer confidence and brings all rates available to book within your channels. Booking.com and Expedia rates are available as standard in all online booking channels. These rates offer more choices to the traveler and have built-in savings while providing the diverse hotel inventory travelers wnat to shop and book. Since negotiated rates won’t always guarantee the best deal, having third-party rates available will help drive value to your program.