Room for Savings: Optimizing Hotel Spend - Carlson

Seven steps to optimize hotel spend > Negotiate effectively
SUMMARY
Key points for effective negotiations:
Property-level negotiations are generally worthwhile for any hotel representing
at least US$10,000 in spend. Under this threshold, companies can consider
chain-wide deals.
Although companies tend to prefer flat-rate deals with preferred properties,
dynamic pricing agreements can bring savings if they are well monitored,
especially in an economic downturn. On the whole, however, companies tend
to prefer the predictability of flat-rate deals.
Companies that negotiate last-room availability tend to pay lower average room
rates over the year, even if the negotiated rate tends to be slightly higher.
To negotiate most effectively, buyers should know the local market, consolidate
room night volumes, benchmark rates, include amenities in negotiations,
leverage city caps and attractive stay patterns, and conduct several rounds of
negotiations as needed. Companies can also renegotiate during the year if
internal or market conditions change to the extent that better rates are likely.
For best results, companies should plan sufficiently in advance, ensure they have
the right resources, and work closely with their travel management company.
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