David Mitchell, senior vice president of Supplier Relations & Global Hotel Strategy at BCD Travel, separates fact from fiction as he answers corporate travel buyers’ questions about hotels.
Q: I’ve heard my hotel sourcing needs to cover 80%-90% of my hotel spend. Is that true?
A: There’s a misconception out there that negotiated rates should make up almost all of your corporate travel program’s hotel spend. The fact is, unless your hotel spend is concentrated in just a few markets, trying to source 80%-90% of it may be overkill. We find our clients get the best savings by covering 65%-70% of hotel spend with negotiated rates and then incorporating other content and spot purchasing. That combines the best saving opportunities with an efficient and effective process and allows for the best money-saving mix.
For our clients, we aggregate a wide variety of hotel content from their programs, our proprietary BCD rates, online travel agencies (OTAs), hotel booking aggregators (HBAs), wholesalers and others in one place: our TripSource Hotels platform. This single platform gives your travelers the shopping options they want and the best value for your program.
Q: Can tools that search for lower hotel rates really drive savings for my hotel program?
A: Yes, using automated tools that look for better prices for previously booked rooms can help you save. Our data shows that customers using BCD’s Hotel Price Assurance can save $30 to $60, on average, on every automatically rebooked hotel stay. Another interesting fact from our data: When Hotel Price Assurance finds a better rate for a traveler’s previously booked hotel room, 42% of the time that lower rate is one of our private BCD rates. Since we’re always expanding our proprietary rates, we expect that percentage to increase. That not only demonstrates the value of price assurance tools, but also of combining your negotiated rate strategy with expanded offerings. The fact is, your negotiated hotel rate isn’t always your best option.
Q: BCD is always saying that TripSource can improve my hotel program. What’s the real value?
A: Our TripSource platform is valuable because it allows your company and your travelers to take advantage of fluctuating rates in the hotel market. Let me explain. Hotel owners have to fill their hotels and drive revenue, and they often sell through more than one channel to make that happen. Each channel serves a purpose, but also creates complexity for hotel revenue managers.
The channels include wholesalers, OTAs and various aggregators, including global distribution systems. Some channels have committed room blocks or a fixed number of rooms at negotiated rates. In addition, they all have their own commission schemes and systems of balancing price and commissions; some are fixed and others are flexible. At the end of the day, all these players have rooms and rates out in the market and are influencing the prices a traveler sees.
Our TripSource Hotels platform aggregates a broad range of channels’ rooms and rates, along with your program’s negotiated rates and our BCD private rates—all in one place. It generates program savings and simplifies booking decisions for your traveler by cutting through the noise. When travelers book hotels through TripSource, they have the rates they expect at the hotels they want when they want them—and all at their fingertips. That boosts their confidence in your program.