In typical hotel negotiating cycles, the season is deemed closed once hotels load contracted rates into the global distribution systems. But the current economic environment, which compelled buyers to demand renegotiations, has put an end to a typical season and forced hotels to undertake the labor-intensive task of continually loading, auditing and monitoring the shifting corporate rates. To lessen the burden, Marriott International Inc. has attempted to streamline and automate the process.
Marriott created an auditing tool, named Property Guest Object Oriented System, that automatically audits every night its proprietary central reservations system (Marriott Automated Reservation System for Hotel Accommodations). For high-volume accounts, this updates negotiated rates so they coincide with published rates. This process enables the company to guarantee that negotiated rates are at or below published rates, putting some clients at ease and curtailing renegotiations, said Marriott manager of pricing and system services Miguel Falcon.
For example, if a negotiated rate is higher than a published rate, the tool will automatically lower the former to mirror the latter. If the published rate is raised after the corporate rate was lowered, then the tool will bring the negotiated rate back to the originally negotiated price.
"PGOOS is our competitive advantage, so when our clients look at the rate, we can give them a savings," said Falcon. "They don't have to worry about a hotel being reactive. We try to be proactive in that nature and try to give them the best rate up-front."
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In addition to self-auditing loaded rates, Marriott also pre-loads negotiated rates before a corporation approves them. Using its own automated RFP tool, Marriott's sales team is able to gather data from a central pricing database that is then distributed to corporate clients seeking a negotiated rate through a request for proposal, said Falcon. Internally, Marriott's team is able to automate the National Business Travel Association's Hotel RFP and respond to customers with a rate. However, Marriott is only able to automate this process if the NBTA-formatted RFP is processed directly through its team.
Once a rate is relayed back to the customer, it is then pre-loaded into its CRS, ensuring that if the rate is accepted, the client will be able to book it--from Jan. 1 the following year, Falcon said.
Marriott keeps the preloaded rates in its CRS for four to six weeks until the client accepts or declines them, according to Jeanne Bertoni, Marriott senior director of account services in meetings and special events.
"We are trying to build a relationship between the hotel and the client," said Falcon. "It's just a sign of good faith to make sure that the rates are loaded in a timely manner."
PGOOS presents a positive and negative for Marriott: The upside is that the hotel is able to ensure that clients receive a fair rate, but the downside is that many rate auditing tools that clients use to ensure their own rates are correct only inform them that the rate is not the exact negotiated figure, Falcon noted. In many cases, Marriott clients are not aware that they are receiving a lower rate than what they had negotiated, which causes additional work for Marriott's team to manually evaluate the complaint.
Additionally, when clients use some third parties to facilitate renegotiations, the process becomes manual because third-party RFP technology does not coincide with Marriott's, Falcon said. Marriott's team must then load all rates manually into the third-party systems, which has taken an expensive toll on the company, Bertoni said. For this process, Marriott hires outside temporary workers to help load the rates. If renegotiations pile up, this process requires the temps to stay on longer, resulting in additional costs the hotel company must incur, she noted.
Manual Millstone
Wyndham Worldwide loads its negotiated rates manually, but instead of hiring outside employees to facilitate the process, the company cross-trained many employees within its worldwide headquarters to load the rates into its central reservations system, said vice president of global sales communications and support systems Marilyn McHugh.
Rate loading is not a typical job requirement for these employees, but as rate renegotiations continue throughout the year, this task that usually lasts two to three months has become a year-round affair, McHugh said. These employees are trained to handle the entire RFP process, she added.
"We prepare ourselves for the season," said McHugh. "We set ourselves up to make sure that we are getting those rates into the system as quickly as possible."
Wyndham is currently cross-training more employees to deal with the increase in demand for new rates, but automation is not in the near future, McHugh said.
"Are we looking at automation? Sure. How far off is it? That's a question I can't answer right now," she said.