The tough negotiating climate for travel buyers once again has delayed the loading of annually negotiated hotel rates into global distribution systems, although hotel buyer and seller representatives agree that the overall process continues to improve, particularly as hoteliers take more of a central oversight role. Not only have some hotel companies streamlined the rate-loading process through improved reservations systems, but hotel rate auditing tool use has increased by both hotels and business travel buyers.
Although the ideal situation for buyers is to have rates loaded by year-end, many hotels still were loading rates in January and others have not even begun. This delay has become customary during the past few years, as hotels have strengthened market leverage and aggressively pushed for higher rates.
"We still have a significant number that are coming in January," said Jill Cady, director of global sales strategies and systems for InterContinental Hotels Group. "The entire negotiation process was a bit delayed. There were a couple of extra rounds this year, because rates were continuing to be pushed a bit higher, and we were seeing that travel managers were holding back on their final approvals."
Kevin Maguire, director of global travel for Austin, Texas-based Applied Materials, was among buyers who said the process was not yet finished in late January, although it was close to completion. "We're progressing. They're being loaded as we speak," Maguire said on Wednesday. "We're going through American Express, so we're probably a week to 10 days away from being fully loaded."
Global distribution system suppliers, meanwhile, reported that from their perspective, most of the rate-loading process was complete. This perspective, of course, would include rates outside of corporate negotiated rates as well.
"Historically, hotel suppliers complete the rate-loading process during the fourth quarter for the following year," according to Kathy Fitzpatrick, Worldspan vice president for North America sales and worldwide travel supplier solutions.
"Worldspan works closely with the hotel suppliers to ensure the rates are available to the travel agents and are confident the majority, if not all, of the rates are now available for sale through Worldspan for 2007," she said.
Despite delays, however, travel buyers and vendors also agree that the process itself continues to get easier. For years, hotels have improved internal processes in order to make rate loading more efficient.
"Surprisingly, it's been pretty smooth so far," Applied Materials' Maguire said. "I think it gets better as everybody gets accustomed to the other side."
Marriott was a pioneer in automating the rate-loading process, with technology in place for nearly a decade, and has since added detailed rate data enhancements—noting whether rates included parking or Internet usage, for example. More recently, Choice International and Wyndham Hotel Group have improved their systems in order to better streamline the process
(BTN, Dec. 5, 2005).IHG's Cady said that her company also has concentrated on automating its process. It takes an average of only 2.4 days for a rate to be loaded once sent from any global sales office, she said.
The active role for GDSs, meanwhile, largely has faded from the rate-loading process, said Stephen Fitzgerald, Sabre Travel Network's vice president of hotel and car distribution. During the past five years, most hotel chains have transitioned to loading all rates into their central reservation system, and rather than loading another set of rates into a GDS, the GDS now just pulls the rates from the reservation system.
"These companies had to do the work anyway to expand their central reservations systems to handle the load of millions of Internet shoppers," Sabre's Fitzgerald said. "It just made sense for hotel companies to work to load rates into their central reservations systems."
It's paying off in accuracy as well. Maria Chevalier, vice president of global business intelligence for BCD Travel's Advito consulting division, said that her company runs a three-phase audit of hotel rates following their loading each year with a goal of 98 percent efficiency. Each year, the hoteliers' performance has improved, according to Chevalier.
Better efficiency does not mean perfection, however, and buyers and hoteliers alike continue to seek better ways to ensure rate-loading accuracy.
Colville, Wash.-based RFP provider Lodging Logistics recently introduced an auditing tool for global distribution system rates. Following its launch, it has seen keen interest from hotel chains in conducting independent rate audits of corporate accounts, said Jennifer Granskog, the company's vice president of business development. While large companies like Marriott have their own auditing systems in place, others are seeking independent verification, she said.
"Hotel chains are wanting to get more involved in the rate-loading process," according to Granskog. "The chains are finding that their rates aren't loaded in the online booking tool—they're loading in the GDS, but not in the booking tool—because of the way the agency is set up."
Cady said InterContinental Hotels Group keeps an eye on its rates by conducting test bookings from global distribution systems after they are loaded into the central reservation system. IHG continues those tests throughout the year, she said.
Sabre's Fitzgerald said the company would roll out some tools in the second or third quarter of this year designed to help agencies, travel management companies and individual corporate buyers check on the status of their negotiated rates. "The fact that we're all more efficient does not change the fact that some hotels are missing some negotiated rates," he said.
As such independent auditing tools have become more prevalent, Lodging Logistics' Granskog said they could translate into a new competitive advantage for hotels wooing corporate accounts. Business travel buyers will have a clearer view of the efficiency of the hotels' systems.
"It's kind of a new thought process," Granskog said. "Before request-for-proposals season, if a hotel is able to show it can load 95 percent of rates by Jan. 1, why would you accept a chain that doesn't?"
As travel managers have found, however, missing negotiated rates is not always the fault of the hoteliers or the GDSs. In recent high-demand years, travelers often have tried to book at hotels in which none of the room types that fall under the corporate agreement are available, so the rate that comes up is not the negotiated rate. Sabre's auditing tool will be able to detect those situations, Fitzgerald said, but IHG's Cady said travel managers should remain alert to those markets that will continue to see high demand in 2007, so that the rate-loading process was not for naught.
"It was an issue that came up quite a bit in 2006, and I expect it to bubble up again in 2007," she said. "It's an education issue that goes back to the traveler."