I was walking along the Riverwalk in Chicago with some colleagues recently. It was one of those perfect late-spring days that make you want to duck into a riverside café, order a cold beverage and stop time for an hour or so. The topic we were discussing as we passed the Langham, the Sheraton and the Swissotel was the variation in hotel rates between Online Travel Agencies (OTAs) and Travel Management Companies (TMCs).
One of the frequent comments I hear from clients during their quarterly business reviews is about finding lower hotel rates at an aggregator website. We know our clients want to keep their travel expenses low so that they pass the savings onto their customers. OTAs give travelers open access to their rate information, but this data sometimes causes confusion and doubt. “Why don’t I get those rates in our booking tool?,” my clients want to know. Here’s my take:
Watch the Fine Print
You might see a flash sale on one of the large OTAs, but the fine print requires full payment upfront. If a big sales meeting gets pushed back by a day, you’re eating that cost. Even small adjustments to a reservation can incur hundreds of dollars in fees. In addition to restrictive booking policies, rock-bottom rates may not include loyalty points or other amenities that business travelers expect. While you might find some slight price differences among the various booking platforms, the overwhelming advantage is with the corporate rate. A TMC can avoid those hidden costs by providing arrangements that can be changed on short notice. All in all, the lack of flexibility isn’t worth the trade-off of this small discount.
Business Travelers Like Loyalty Points
As we learned from panelists at our recent Leadership Forum in Chicago, Millennial road warriors play the points game as frequently and effectively as Gen-X and Boomer business travelers. Their top consideration when booking accommodations for work trips is reserving at a hotel property where they have status and can increase their point balance. A favorable travel policy – like one that lets employees rack up rewards points - goes a long way toward attracting and retaining valuable employees. You really want to show some love to the people you send out on the road to be the face of your company!
We know our clients want to keep their travel expenses low so that they pass the savings onto their customers.
Volume Discounts Need Verification
We work with our hotel suppliers to provide our clients a corporate rate based on your planned travel spending. Say your company expects to spend 250 nights a year in a London hotel near your long-term project. If you're committed to buying those room nights from one of our preferred suppliers, your discount could be 10% or greater. If a large corporation promises to fill 1,000 hotel rooms per year, it can expect an even greater discount. These corporate rates are never published since the leisure market can’t be offered these savings. The catch is that if you don't produce the volume, your discount may be dropped or changed. ‘DIY’ bookings can jeopardize volume sales targets, making it difficult to concentrate your spend to keep or regain access to corporate negotiated rates and deals in the future.
A travel management company can often reduce overall trip costs by negotiating many of the extras that corporate travelers need and appreciate like on-site breakfast and free Wi-Fi included in the rate. Our reporting software tracks travel trends so our Account Managers learn where your team is traveling and can start finding discounts in those cities by showing the benefits of concentrating your volume on a few preferred suppliers vs. scattering your spend across many. The same reporting software can demonstrate the ROI that business travel brings to your bottom line without having to reduce your travel volume as some companies feel.
Added Value for Your Employees
Hotels are more likely to assign their best rooms to their loyal corporate clients. And, many corporate travel policies allow employees to use the corporate rates for their personal travel. The more hotel nights booked against your corporate rate, the better. And if your staff is paying the bill, this works out nicely for everyone by increasing employee morale, engagement and retention.
Ready to speak with a corporate travel expert about how you can better manage your business travel? Get in touch with us to schedule a free consultation that can help lower costs and improve employee productivity.