Lesson 1: Corporate negotiated rates aren’t as competitive as they should be.
Based on the performance of 150 BCD clients, when compared to Best Available Negotiated Rate (BAR), discounts of 20% or more are only offered about one-third of the time (34%). Fifteen percent discounts are offered just slightly more often at 36% of the time. Discounts of 10% or more are offered 50% of the time. That means that half the time, the travel program gets about the same deal as someone who walks off the street to book a room.
Lesson 2: Negotiated discounts aren’t always the cheapest in the market.
For the BCD customers we examined, negotiated rates were not the cheapest 23% of the time. In 28% of cases, the negotiated rate wasn’t made available at all. Preferred programs should be closely monitored to uncover discrepancies, ahead of the next round of sourcing.
Lesson 3: Booking hotels in advance doesn’t always save money.
Are you giving your travelers the right guidance when it comes to pre-booking? Maybe not. Among the clients, last-minute bookings were 13% lower than bookings made three weeks in advance. Over a quarter of the bookings made in our systems by the group happened with three days of hotel check-in – and only about 5.1% were cancelled through BCD systems. With your program manager, reexamine the role of prepaid and nonrefundable rates in your program. Identify scenarios where booking closer to check in could offer significant savings. Consider offering restricted rates to travelers, then educate them on when and how to use them properly.
Lesson 4: Hotel loyalty programs are great – but your travelers aren’t really reaping the benefits.
We found 92% of studied travelers booked 24 room nights or less annually. That’s typically not enough to move the needle on status or perks. Through your own analysis, you may find that you can place less weight on loyalty programs as a factor in the hotel selection process. It’s better to make sure you offer travelers the right mix of hotel content to get the best overall deal.
BCD clients, contact your program manager for more details. Not a client? Contact us.
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