Room for Savings: Optimizing Hotel Spend - Carlson

Figure 12: Most corporate hotel bookings are made by travelers contacting hotels directly,
although the proportion made through TMC booking channels is growing
Estimated use of different distribution channels as a percentage
of corporate bookings
Mid-1990s 2008 Future trends
Internet
(online travel agencies,
online hotel specialists and
hotel-branded Websites)
Hotel/chain
call center
~15%
~10%
(hotel-branded Websites)
(online travel agencies and
online hotel specialists)
~10%
TMC
(online booking tool
or counselor)
~25%
~90%
Hotel directly
(phone/fax/email)
~50%
Source: CWT Travel Management Institute
Today, business travelers have little incentive to
shop around. Notably, travelers who book
through Web hotel booking specialists cannot
access their negotiated corporate rates, nor
benefit from the one-stop shopping for hotels,
flights and ground transportation provided by
TMC booking channels. Moreover, “price parity”
is common practice today, meaning hotels offer
the same public rates via multiple booking
channels. This practice emerged to help hoteliers
regain control over their room rates, instead of
enabling Web resellers to offer major discounts
(which occurred particularly after 9/11, when
occupancy dropped dramatically). With price
parity, many hotels no longer keep their best
rates for their own Websites, even though this
distribution channel enables them to limit GDS
costs while building direct contact with
customers. Lower prices are sometimes available
on different channels, but often they come with
restrictions (e.g., cancellation penalties and
immediate payment).