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3 MUST HAVE strategies to reduce your business travel hotel costs

3 MUST HAVE strategies to reduce your business travel hotel costs

With hotel rates predicted to rise by 5% in 2017, figuring out how to keep them low is bound to be a consideration for most buyers and managers of business travel this year.

Here are our top three must have strategies for reducing your business travel hotel costs.

#1 - Negotiate a corporate rate programme

Corporate rate programmes are an excellent way to save money on your hotel costs. How much leverage you have will depend on the volume of bookings; however, hotels are usually willing to do a deal when you place at least 100 nights in a particular area. To get started, you need to analyse your hotel spend:

  1. What hotels has your business booked during the last 12 months?
  2. How many nights has your company booked in each hotel?
  3. What is the average rate paid in each hotel?
  4. Split the hotels booked into areas, how many nights have you booked in each location?
  5. What is the average rate paid in each location?

Once you have the above information, you should be able to see where your opportunities for negotiation are. A mistake some businesses make is to negotiate with a hotel based on their previous spend in that hotel alone, but by doing so, they could be missing crucial data that could lead to lower rates. For example, if you have 40 nights in Hotel A, but you’re actually using six hotels in the same location with 40 nights in each, your negotiating power is much bigger. Instead of just 40 room nights, you actually have 240, which is much more attractive. Consolidate your rooms by location into one or two properties and you should find the hotels will be more favourable when negotiating on your rate and terms.

Once you have a hotel rate programme in place, you need to make sure these rates are both visible to your employees and easy to book. This is simple if you’re using a travel management company because they will load your rates into their systems, which means not only will your preferred rates be booked, they’ll be compliant with your travel policy too.

TIP - If you’re using a TMC, they should have all the above covered for you :)


#2 - Search and book Internet hotel rates through your TMC


Unfortunately, a hotel programme, while a smart move, isn’t always going to guarantee you the lowest price every time. So even though they are a crucial piece of the jigsaw when it comes to reducing hotel costs, they’re only effective when combined with some other strategies. Your employees need to be able to see and book these rates when they enquire over the phone or book their hotel online, but they should be easy to compare against the other rates available. Typically, Business Travel Agents will source content from:

  1. a Global Distribution System (GDS) such as Amadeus, Galileo or Sabre
  2. websites like or similar
  3. the TMC’s own discounted rates with hotel suppliers
  4. a client’s hotel rate programme

Hotel rates fluctuate all the time, so being able to see all these sources of content together is crucial to ensure you always book the lowest rate. So even if you have a negotiated rate at Hotel A, Hotel A might be selling it cheaper than your negotiated rate via - so naturally you’ll want to book through Next time, the GDS may offer the best rate and the time after that it may be the corporate rate that gives you the best deal.

By accessing all the above content channels through your corporate travel agency, you can be sure you’re able to evaluate all market rates in a single search and book whichever one offers the best deal at the time, using the same simple booking process.


#3 - Implement hotel spend limits within your business travel policy

It’s all very well negotiating rates in your top destinations and making sure you’ve access to the best content in a single place, but it’s a waste of time if you’re not going to control how much employees spend when booking a hotel. The best way to do this is to set spend limits by area that are outlined within your corporate travel policy. So for example, you could say in London the maximum rate is £150, in all other key cities it’s £130 and the rest of the UK it’s £100. By setting a limit employees are not permitted to exceed, you not only control your spend but you also offer them a degree of flexibility so your employees can choose which hotel they prefer, providing it’s within the set limits, rather than forcing them into your ‘preferred’ properties every time.

For more details on how to write and enforce a business travel policy download our free guide here.

If you can implement these three simple strategies, you’re sure to be on the right track for keeping your hotel rates as low as possible during 2017 and beyond.

Reducing the costs of business travel for the Construction Industry


About Andrea Harrison

Andrea is a key member of our account management team, and uses her 30 years business travel experience to optimise our customers’ business travel programmes. Andrea has been with us since 2002 and before that spent almost 15 years working for one of the world’s largest travel management companies.
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