The wait-and-see attitude some buyers adopted during hotel negotiations this past season has not severely delayed the 2009 rate-loading process, with many buyers and consultants reporting that hotel rates were loaded into the global distribution systems with improved accuracy and speed this year. The economic downturn, however, is providing a new set of buyer challenges, including a need for heavier monitoring to ensure negotiated rates remain the best deal and the potential for aggressive rate squatting.
Neysa Silver, director of hotel consulting in the Americas for Carlson Wagonlit Travel's Solutions Group, said the majority of the agency's programs are complete, with the first round of audits done as well as a good portion of the second round. As of late January, about 71 percent were showing accurately loaded rates, an improvement from the 67 percent success rate of last year, albeit for a different client set, she said. The agency now is aiming to decrease the amount of time it takes to reach full accuracy, she said.
"Historically, it's taken four or five rounds, so we're waiting to see if the cycle is decreasing," said Silver.
Dominion director of travel and corporate services and Business Travel News' 2007 Travel Manager of the Year Donna Kelliher saw about the same success rate, with about 70 percent of her rates loaded in early audits, she said.
BCD Travel also has completed its first round of audits for most clients, said Kathy Pruett, senior director of consulting for the agency's Advito consulting arm. Accuracy levels were similar to last year, with about 56 percent of hotels loaded accurately, about 30 percent inaccurately and the rest not loaded at all. Part of the inaccurately loaded rates can be attributed to extra negotiations after hotels had preloaded rates, she said, and the global nature of many BCD clients' programs was still a challenge.
"The programs that are managed in other parts of the world have a little lower success in having rates loaded accurately this first time around," Pruett said. "In Europe, Asia and Latin America, the global distribution systems have not been as prevalent in the booking process."
Logitech International worldwide travel manager Ralph Randle said he does not bother with those hotels in Asia that are not in the GDSs, but his 2009 rates otherwise are loaded. He had about 100 hotels selected by the end of November, so the process was smooth, he said.
"We completed that prior to the end of the year, so we're a little ahead of the curve," he said. "It has gotten easier, especially when you're working with the same hotels each year, providing you don't give them anything more complex to work on."
First-round audit results on Sabre—produced by its recently acquired BidStork tool—showed a range of 76 percent to 88 percent compliance with negotiated rates, said DeAnne Dale, vice president of sales and account management for Travelocity Business. Hotels in recent years have loaded rates into their increasingly centralized reservation systems, easing the process for GDSs
(BTNonline, Feb. 5, 2007)."We definitely are seeing a little quicker response to the rate-loading process from hotels," Advito's Pruett said. "They have improved a lot of their technology to get into the GDSs in a more judicious manner."
Best Western International this year adopted technology to ensure accurate rate loading, said director of worldwide sales Sandy Taylor, and rates are loading more efficiently than ever this year.
"This is due to a concerted, collaborative effort between our worldwide sales department and our electronic distribution team," according to Taylor. "When rates are submitted for loading, our electronic distribution team establishes a timeline so that the sales managers can advise their clients."
Many chains also have improved their communication during the rate-loading process, sending out e-mails to notify corporate customers that the loading is complete, said Bob Peper, president and CEO of hotel procurement technology supplier Lodging Logistics.
Buyers still see some problems. Dominion's Kelliher said rates routinely fall off after a few months, having been loaded only through March or April.
Consultant Robert Langsfeld, president of Hotel Solutions, finds that generally 20 percent of rates are incorrect at the time of booking. Disappearing rates are not acts of malice, he said, but often the result of problems with the coding or changes in hotel management.
"People are spending all this money, time and effort in developing a hotel program, and once they've made sure rates are loaded correctly, they walk away," according to Langsfeld. "You need oversight throughout the whole year, because there are all kinds of unplanned changes."
Advito's Pruett recommended a mid-year audit to check for dropped rates. Lodging Logistics' Peper also said the rate audits alone are not enough, as even loaded rates can fail to appear because of yield management practices.
The change from a seller's to a buyer's hotel market has presented some challenges.
"We had a significant increase in the number of hotels seeking increased access to corporate buyers," said Jeanne Watters, manager of global and client hotel programs for Sabre's SynXis, which supplies hotel distribution technology and services. "It wasn't just a matter of hotels extending rates and availability for 2009, but that many had to build new rates, and those needed to be mapped to the global distribution system."
Buyers also will need to ensure their corporate rates remain the best deal. Dominion's Kelliher said she's already seen some rack rates equivalent to negotiated rates.
"I want to monitor the true value of the program we have," she said. "It's all captured, and we can see a gap with the negotiated rate and the rate that was booked."
Carlson Wagonlit Travel's Silver said, "Some systems will take the negotiated rate down if the best available rate drops past the negotiated rate."
Rate squatting—in which hotels that are not part of a company's program load rates mimicking preferred hotel codes to gain usage—has been a constant problem for travel managers, and Silver said declining hotel demand could make hotels more aggressive about loading non-negotiated rates this year.
Both Kelliher and Randle said it is something they monitor, though Kelliher said it has not been a big enough problem to impact her preferred hotel volume.
"Buyers have to beware not only of squatting by other properties but also by rates," Langsfeld said. "For example, there could be a single negotiated rate, but a property might also put in rates that are for the concierge level."