‘Tis the season to put a bow on your hotel program?!
November 30, 2017
There’s usually a huge sigh of relief – or a final sigh of exasperation as you dig in for the final run at your hotel programs for 2018. Of course the frustration is that it will seem like a few weeks rather than months have gone by when the process begins yet again. We won’t go on about how we, along with many others, think the model is broken and that you should do your hotel RFP when the time is right for your business.
A few items for your consideration, planning and to help you make sure your program is maximizing savings. Take the time to review your 2017 program and closely look at those properties with a high incident of not honoring LRA, loading rates or honoring them – if there is a property who had higher than a 15% incident rate (provided they are still in your program) they should probably be on the naughty list.
A question that follows from this is utilizing dynamic discounts. It’s been a few years since these have become more prevalent in the marketplace and given the sophistication and development of revenue management tools for hotels it only makes sense to have this as a growing part of your hotel program. If they aren’t part of your program and you have significant volume over multiple locations we strongly suggest including them in your program for next year.
No doubt the inclusion of terms around cancellation fees became much more important this year. It’s equally important to ensure give-away amenities are properly valued in agreements. Your effective net discount can be impacted strongly by the inclusion of soft dollar items/amenities - I’ve never seen a company post their quarterly earnings in soft dollars so mind them closely! Is a free breakfast really free when it is part of standard brand amenities – the same goes for wi-fi when your travelers are members of a loyalty program or use their unlimited mobile plans for faster access anyway. Shuttle service in the local area can be invaluable but if it is offered to everyone is it really a deal for you? Loyalty rates at parity, or very close to, your negotiated rate should perhaps be the standard that you ask and push for to help ensure that your travelers build loyalty to your partners but also stay in your program.
It is highly likely you’ve covered or attempted to address these in your program. Perhaps you encountered pushback from hotels but it helps to set the boundaries and clarify what is a value for you in your program. One additional item to consider as you move forward into the new year is the impact of multi-source booking tools that all of the mega TMCs and many others have developed. We’ll be talking more about that in upcoming blogs but it’s important that your booking tool be able to clearly define the parameters of what is accepted and expected in your program versus simply displaying content from multiple places. As you wrap up this year, put it under your tree and begin planning for next year keep these items in mind.