Room for Savings: Optimizing Hotel Spend - Carlson

GDS rate squatting. Regular GDS audits can
also help companies manage the problem of
rate squatting, which occurs when GDS
codes intended for a company’s preferred
hotels are used by non-preferred properties.
Rate squatting occurs, for example, when a
hotel uploads rates after an agreement has
expired or when a chain uses a preferred
provider code for individual properties that
are not included in its contract with the
company.
TMCs use robot technology to scan GDSs
and flag squatter rates. In this way, a CWT
study of two global companies’ transactions
made via a GDS showed three squatter
hotels for every preferred hotel. Furthermore,
squatter hotels accounted for 4-5 percent
of their 9,000 bookings. Further analysis
revealed that a large share of those
transactions involved a small number of
squatters: in one case, nearly half of the
rogue transactions involved 7 out of 50
squatter hotels. In the same example,
squatter rates were on average 21 percent
higher than the average rate paid at preferred
properties in the same city, as shown in
Figure 120. It can pay therefore to identify
rate squatters and work with hoteliers to
resolve such problems.
Figure 120: One company paid on average 21% higher rates at squatter hotels vs. the average
rate paid at preferred hotels
Difference between average rates paid at the top 7 squatter hotels and preferred hotels
(Company G - November 2008)
Hotel
City
City covered
by program
Number of
transactions
ARR paid at
squatter hotels
(US$)
ARR paid at
preferred
hotels (US$)
Price
difference
(%)
A
B
Krakow No 5 182 - -
London Yes
15 342 238 44%
C Milan Yes 9 244 249 -2%
D
E
Milan Yes 6 170 249 -32%
Oslo Yes 14 339 253 34%
F
Rivas-
Vaciamadrid
No 8 104 - -
G
Average room
rate (weighted by
number of
transactions)
Zurich Yes 6 259 214 22%
293 243 21%
* In cities covered by the program
Source: CWT Travel Management Institute