INSIGHTS
Negotiating hotel rates for your travel programme
Irish companies spending a large amount of money on hotels have an opportunity to save money. By understanding how much you are spending on hotels, and in which cities and properties, your travel management company can help you build a hotel programme and secure hotel rates that include a discount and/or free amenities.
If you're looking to spend less on hotels - here are the types of rates available, and what to consider when building your own hotel programme.
Types of hotel programme rates
Corporate rate: A negotiated rate available at specific hotel chains or individual hotels for your company's travellers. Rates are typically for certain room classes, eg a standard room , or inclusive of specific extras such as Wi-Fi or parking.
Suitable for: Large-budget corporates who value rate certainty.
Dynamic pricing: A corporate-specific discount which can be applied to all the hotel’s Best Available Rate (BAR).
Suitable for: Managed programmes that can negotiate aided by good insight into their volume and pattern of spend.
TMC rate: Available to customers of a specific travel management company, for example, FCM's own Breakfast Plus programme covers 5,000+ properties.
Suitable for: Smaller volume business measured either by total accommodation spend or per destination or property.
Rate caps/per diems: Freedom to choose any hotel based either on a cap for the room rate, or a ceiling on daily subsistence spending.
Suitable for: Companies that value traveller choice and autonomy, and are less concerned about compliance for purposes such as duty of care or consolidating spend.
What to consider in hotel negotiations
Volume and location
Focus on key destinations. Where are your colleagues travelling to the most - do they use the same hotel often, or go to the same cities? Once identified, your TMC could approach an individual hotel or a group to negotiate a discount or additional amenities in a rate for you. Leveraging the volume of bookings you are making with one or two hotel chains could mean a sizeable discount. Then even when only one traveller is booking one night with a contracted chain, that traveller will still be able to benefit from a discounted corporate rate.
Total cost of travel
When pulling data such as travel expenses, you might find your colleagues are spending a lot of money on items like parking, hotel restaurants or Wi-Fi. Those are the types of amenities that can be negotiated into your special hotel rate. It will make your proposal more attractive to hotels, as they are getting more out of the deal. Think about the days of the week your colleagues are travelling - many hotels are already full on Tuesdays but not so much on Sundays or Mondays. If you regularly hold meetings or events in hotels - bring that data to the table too. The larger the volume, the more attractive the discount possibility.
Consider tiers
Naturally, not everyone will want the same from their hotel. Many organisations opt for tiers in their travel programme where they'll have chain-wide deals, or a rate at a specific independent hotel.
Points mean prizes
People who travel a lot for business earn significant loyalty rewards. Such benefits cost the corporate customer nothing and a company can use these points as an incentive to achieve greater programme compliance. Points can also be a keen retention tool for frequent travellers because as the traveller accumulates points and moves through tiers, they will receive more benefits such as upgrades and free WiFi.
Customer experience, not just savings
Any accommodation strategy isn't only focused on saving money, but ensuring travellers like the chains and properties too. That's why it's important to pull that data and assess your options based on current behaviour. It isn't impossible to encourage travellers to use different hotels, but it helps if you know what hotel type they like. You can understand if they want breakfast, Wi-Fi, a gym, a modern style or something more traditional.
Don't just negotiate and then assume
Run reports and audits to check that the rooms you negotiated are available, and that your colleagues are booking them. Your TMC should check that the rates are available to book and if not, resolve the issue. They can also investigate any bookings which have been made above the negotiated rate.
If a hotel is unable to comply with your needs over time because of rate unavailability, it might be the time to explore other options.
Similarly, if your travellers are not booking at the hotels you negotiated, they might not be the right match. You may even need to consider smaller, boutique properties, service apartments or shared accommodation like Airbnb.