A recent survey conducted by GBTA and HRS reveals that business travel buyers face significant challenges with hotel rate transparency, leading to increased costs for companies. The study highlights that rate leakage and a lack of clear visibility into negotiated rates are prevalent issues within the global business travel industry.
### Understanding the Rate Transparency Challenge
A core problem identified is the difficulty in ensuring travelers book within negotiated corporate hotel programs. The survey indicates that a considerable portion of hotel bookings occur outside these agreements, often resulting in higher prices. Buyers struggle with various aspects of hotel rate management, including the consistent availability of negotiated rates, ensuring last-room availability, and maintaining rate parity across different booking channels. Finding the best available rate for their travelers is another frequent hurdle. This lack of transparency and control means companies often pay more than necessary, with rates potentially climbing significantly higher than negotiated prices.
Many travel managers find it difficult to track and monitor the rates their travelers book. Even when negotiated rates are available, companies face challenges in guaranteeing their use. This issue is compounded by difficulties in auditing and controlling the rates booked by employees, leading to substantial potential savings being missed.
### Strategies for Improving Rate Management
To combat these challenges, the survey points to several strategies that business travel buyers are considering or implementing. Enhancing direct connectivity between corporate booking tools or Travel Management Companies (TMCs) and hotel central reservation systems is seen as a key step towards better rate access and compliance. Consolidating bookings to preferred channels and implementing centralized hotel procurement strategies are also crucial.
Further recommendations include educating travelers on policy compliance and the importance of using negotiated rates. Technology plays a vital role, with solutions like dynamic pricing models and robust rate audit systems being explored to ensure companies secure optimal rates. The focus is on leveraging technology and process improvements to gain greater control and transparency over hotel spend, ultimately driving cost savings and improving policy adherence across the organization.
### Key Points
* One-third of hotel bookings made by corporate travelers are not within their negotiated corporate hotel program.
* Rates for employees can be as much as 30 percent higher than agreed.
* Only one in three travel managers is confident that employees always book negotiated rates.
* Three-quarters of buyers cited rate visibility or finding the best available rate as a frequent challenge.
* Nearly 60 percent of buyers ranked rate availability as a frequent challenge.
* 46 percent of buyers reported difficulty in monitoring rate availability across channels.
* 45 percent of buyers indicated a lack of real-time rate audits.
* 43 percent of buyers cited challenges in accessing last room availability.
* 41 percent of buyers experienced rate parity issues.
* 36 percent of buyers reported difficulty in enforcing preferred channel usage.
* 34 percent of buyers found difficulty in finding the best available rate (BAR) within the negotiated rate structure.
* Around one-third of respondents believed they could save up to 15 percent on their overall hotel spend.
* Just 14 percent of respondents use a centralised hotel procurement strategy globally.
* The average number of hotels booked through preferred channels is as little as 20 percent.
* Savings of up to 15 percent of overall hotel spend are estimated.
* The survey identified three categories of rates: negotiated, best available rate (BAR), and dynamic.
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