9. Implementation
• Understand the nuances of your travel programme.
• Does the online booking tool have all the content you need?
• What success has the supplier had with similar customers?
• Get the right team involved.
• Stakeholder Buy-in or Mandate.
• Communicate, communicate, communicate!
13. Hotel dynamic pricing
13
Hotels are encouraging new corporate pricing model
Ongoing
Rate based on occupancy
on the day
Hard to explain why rates
vary and difficult to budget
There are several hybrid models available. The most popular version is to
negotiate in your top destinations, and use dynamic pricing for secondary cities.
Regular negotiations
Rate depends on
volume and room type
Easy to show savings
and budget spend
16. Challenges
What are the key challenges for your travel risk management program?
16
0 20 40 60 80 100
No clearly identified ownership of travel risk in the company
Information about risk is kept in silos and isn’t easily…
Lack of senior management support
Lack of employee engagement leading to empty contact…
Multiple data sources: knowing who is where and who is at risk
Travel policy compliance
Knowledge gap – unsure of what good travel risk management…
Data privacy concerns
Other, please specify
Lack of employee engagement leading to empty contact
records, etc.
Travel Policy compliance
17. Safe and productive
Fulfil your duty of care by protecting your travelers, your bottom line and your reputation
17
Use geolocation, voice control and your camerato capture expenses without typing.
APAC 77%
EMEA 76%
Latin America 74%
North America 81%
Global Average 78%
Spotlight – are hotels trying to force corporate clients into dynamic pricing?
The traditional hotel request for proposal (RFP) process is lengthy, laborious and costly for both buyers and suppliers. So, for several years, hotels have encouraged corporate clients to switch from fixed negotiated corporate rates to dynamic pricing – a small discount off the best available rate (BAR) on the day.
Hotel dynamic pricing is appealing in some ways – for example it may reduce the time-consuming annual negotiation process – but in contrast to the air dynamic pricing model, it’s difficult to measure savings. And, some buyers suspect they will lose heavily during periods of high occupancy and have a harder time budgeting likely travel costs.
On the other hand, over the past year, more hotels are reducing the number of rooms available at the corporate rate. This is happening even when the client is guaranteed the corporate rate on any rooms in the hotel that are still unsold. This type of guarantee is known as last room availability (LRA), but hotels are finding ways around this by manipulating their room type inventory based on demand. These more sophisticated yield management techniques restrict corporate rates during peak periods and reduce the type of inventory available at the negotiated corporate rate. For example, standard room inventory may change by day of week.
As hotels close out more dates at the negotiated rate, some buyers are considering if it is worth negotiating rates that hotels do not honor when travelers try to book them. As a result, a few are switching to the dynamic pricing model.
Dynamic pricing can work well for some companies – particularly those whose travelers generally book well in advance of arrival. This new hotel pricing model is still evolving and we expect to see some changes as it develops. To learn more about this trending topic, please reference Advito’s newest white paper, “Rate Expectations: Is dynamic pricing coming of age?” available on the Advito website.
The best solution for this change is to be well organized and proactively manage your fixed rate hotel program. Advito now offers a rate availability auditing tool, which checks how often the rate the client negotiated is actually available. Armed with this knowledge, buyers can confront the hotel with clear evidence if they’re not getting the rates they negotiated. Hotels are far less likely to block out customers that are actively monitoring their bookings.
Advito also offers a rate parity audit, which compares how the client’s negotiated rate compares to online rates for the same hotel over a six-month period. If the internet rate has been cheaper, Advito or the client will warn the hotel they risk weakening the program because lower rates through the internet encourage travelers to book outside official channels.
Challenges full text:
No clearly identified ownership of travel risk in the company
Information about risk is kept in silos and isn’t easily accessible/shared
Lack of senior management support
Multiple data sources: knowing who is where and who is at risk
Travel policy compliance
Knowledge gap – unsure of what good travel risk management should look like
Lack of employee engagement leading to empty contact records, etc.
Data privacy concerns
Other, please specify