Hotels Account For More Of Travel Budget

<B> Hotels Account For More Of Travel Budget</B>

By Lynn Woods

Companies are spending a bigger chunk of their budget on hotels than in the past, which might mean they're overpaying their travel agency, said Rolfe Shellenberger, senior consultant at Runzheimer International in Rochester, Wis. "There's been a redistribution of money from airlines to hotels," he said. "The hotel used to be 50 percent of air, but in the case of large companies, hotel is now accounting for 60 percent of the air on average."

Why? "Companies are negotiating better deals with the airlines, or using discount carriers. A lot are on net fares, so the cost of travel agency services do not show up under the airline side," he said.

Companies "are paying more to the agency than they need to" because they're paying the same rate for hotels whether or not they are using nets or commissions, he added. "Companies didn't pay much attention to commissions for hotel. But if hotels are 60 percent of air and are fetching 10 percent commissions, the commissions are measurably larger."

Adding to the problem is lack of compliance to the hotel program. "If you go to a corporate travel agent and ask what percentage of hotel business is commissionable, they'll say 60 to 70 percent," he said. "In many cases the traveler is booking outside the system. There's a lot of leakage of information."

Other hotel-related issues meriting attention:

* Hotels are charging more early checkout fees. The surcharges, ranging from $25 to $50, that some properties levy on travelers who check out a day or two early are rising.

"We saw more of these last year than the prior year," said Rick Wakida, travel analyst and technology manager at AirTouch Communications. "Hotels are looking for additional revenue. This also helps their yield management." Savvy travel managers whose employees have changeable schedules might want to consider negotiating out the charges in their next contracts.

* Internet access fees. "As hotels upgrade their telecommunications lines, they're going more toward charging for the access," said Wakida. A traveler might get online to check e-mail and go out to dinner without disconnecting his or her computer, racking up a huge amount in fees. "Travel managers need to educate travelers about these potential fees to avoid the unpleasant surprise of a large bill," he added.