Room for Savings: Optimizing Hotel Spend - Carlson

Leverage city caps. Experience suggests that
hoteliers may take a company’s city caps into
account during negotiations and try to align
their rates so that they can be included in the
program. This is illustrated in Figure 93,
which shows the room rates obtained for
comparable volumes at six hotels by
companies with and without city caps.
Figure 93: Hoteliers may lower their negotiated rate to align with a company’s city cap
Note: The analysis includes company T, company F, company I and company H. Each comparison is for two companies with similar volumes of
room nights.
Source: CWT Travel Management Institute
Conduct multiple negotiation rounds.
Companies often find it worthwhile to
negotiate beyond the hotel’s initial response,
regardless of whether the hotel is an
incumbent preferred property or a
competitor. As an example, Figure 94 shows
how one company obtained a further 6
percent discount in the third round of
negotiations. Conducting several rounds of
discussions as necessary can reduce rates
significantly. The two companies shown in
Figure 95, for example, lowered their average
negotiated rate by a further 3-4 percent in
this way.