Building a Hotel Programme
Our step-by-step guide to putting together a hotel programme will help you reduce spend by consolidating to fewer hotels.
The best way to reduce your per night spend on hotel accommodation is to set up a hotel programme which mandates bookings in one or two properties per location. It seems an obvious cost-saving exercise, as by placing the bulk of your bookings with a handful of hotels, those hotels are more likely to offer you a discounted rate.
Yet, it's amazing how many businesses have no mandatory hotel programme in place. Many SME's assume that their hotel accommodation spend is not large enough to warrant hotels giving them a special rate. Here's our approach to building a hotel programme.
The first step is to evaluate your hotel booking patterns, locations, the rates being paid and room night volumes. In order to leverage a preferential rate you need to be booking between 30-50 room nights per annum in any one location or at least 100 room nights in London, for example. Your hotel booking agent can then draw up a report summarising where, when and how you are spending on hotel accommodation.
You and your hotel booking agent should discuss the report together, alongside your hotel needs in terms of locations, types of properties, any rate cap and what needs to be included in the rate, such as breakfast or wifi. The aim is to draw up a shortlist of around four hotels per location.
Your hotel booking agent should then begin the negotiation process, beginning by sending a request to the shortlisted hotels with a covering letter emphasising that they have been selected to tender for the programme. The advantage for SME clients is that unlike large corporates they are not restricted to setting up a hotel programme which runs for the calendar year. This means that your hotel booking agent can approach hotels at any time of year to initiate a programme. Once each hotel has responded, your hotel booking agent will evaluate each proposal, assessing whether the rate is suitable and re-negotiating if necessary.
Once negotiations are complete, the selected hotels will be instructed to draw up a rate agreement for you to sign and then your hotel booking agent will normally use a special code to access the preferential rate.
A good hotel booking agent will stage ongoing assessments of the programme, running reports to assess if the mandate is operating successfully and selected hotels are getting the nights they require to renew the deal in future.
Results! The savings made for a recent client in one location alone were over £5,500 per annum. The average, best available, hotel rate was £150.00 per room per night, but this was negotiated down to £105.00 based on the client booking 130 room nights per year.
This is just scratching the surface in terms of cost savings. The nature of SME business, however, is that without a hotel programme in place they tend to book the best available rate with last minute availability, which is costly.
If you feel that your business will benefit from building a hotel programme then we can help you to develop a dedicated programme of hotels or venues which will provide you with the best options to meet your needs and provide the best value for money.