Software Targets Rate Loading In GDSs: Wrong Room Rates Rampant

Travel managers and industry sources told BTN that the perennial rate loading problem has gotten even worse this year. Hotels loaded an estimated 30 percent to 50 percent of 2003 negotiated rates incorrectly into the global distribution systems, according to a vendor that audits hotel programs.

In addition to not finding their negotiated rates at all, or finding them incorrectly loaded, buyers are seeing rates loaded with confusing descriptors that stymie travelers and agents intent on booking the approved rate in the GDSs.

In response to chronic rate loading issues, technology provider Lanyon in January introduced software that confirms for hotels—and buyers—that the correct rates have been pushed through to the GDSs. The goal of the Lanyon approach is similar to existing products by Eclipse Advisors and TRX that provide programwide rate audits and report significant increases in usage this year.

For such buyers as Lisa Bliss, manager of hotel programs for Boeing, rate loading issues grew even more Byzantine in recent months. Besides ensuring that the negotiated rate is present and accurate, Bliss has concerns about the language used to identify the rate. "Too often, the correct rate isn't loaded to the buyer's specifications, meaning the rate type description in the GDS isn't always consistent with the buyer's direction," Bliss said. "Travelers will have the best intention, wanting to follow the company's travel policy, but don't recognize the rate they've been told to book and end up mistakenly booking another rate. When travelers can't book them, buyers get frustrated, because we're not getting the best deal for the company."

In protesting the rate loading situation with hotels, buyers have been forced to resort to a carrot and stick response: Load the rates accurately or risk losing the business. "Basically, we were forced to say, 'We've picked two or three hotels in your area. Whichever loads the rate first and loads it accurately has a chance to get more of our business next time,' " said Yasuo Sonoda, travel manager at Macromedia in San Francisco. "You don't want to have to use rate loading as an incentive this way, but it gives the hotels a reason to cooperate."

In responding to the rate loading issue, Lanyon chose to work proactively at the GDS level. "Once rates are finalized by all the parties through the request for proposals and negotiation process, we take that information from our existing Property Vault application and publish it electronically to the GDSs and/or the central reservations system," said Lanyon COO Mario Sagastume. "This helps ensure rate consistency. The rate that is accepted is what gets pushed out. After all, what was negotiated is what should be loaded."

For their part, buyers are provided with a report that indicates precisely which rates were loaded. "This is preferable to getting calls and e-mails from hotels, which can be sporadic and inexact," said Sagastume, who is based in Western Springs, Ill. "At the same time, should any rates in the system be unnecessary or confusing, buyers have the opportunity to contact the hotels and request they be removed."

By contrast, Eclipse Advisors and TRX took the audit approach. "So far, we've audited rates at several thousand properties for 2003 and the error factor is running between 30 percent to 50 percent," said Karen Richard, managing partner for hotel solutions delivery at Eclipse Advisors, a travel procurement firm. "In many cases, rates this year were late getting finalized. Therefore, they were late getting loaded, meaning after the start of January. Even with that, the job easily should have been completed by mid-February."

Richard called unacceptable the high levels of error. While the audit will generate an error message for a rate discrepancy as small as 50 cents, many rates were off by $5, $10 or $15 a night. "This kind of difference for a hotel in a key destination that is frequently used by an account could result in a five-figure lost savings opportunity if it's not addressed quickly," Richard said.

Eclipse conducts a two-phase electronic audit, first notifying those hotels that they have no rate loaded, the wrong rate or are squatting in a hotel program. A few weeks later, it confirms that the inaccuracies have been corrected. Buyers are provided a summary after the initial audit and a follow-up report.

Buyers using TRX's Contrax product provide a file of relevant information, including the GDSs they want searched. "We grab the file and hit the GDSs to see if we can find the rate in the appropriate format in the GDS," said Steve Reynolds, executive vice president and general manager of TRX in Dallas. The buyer or agency then receives a report.

Unlike Eclipse's service, Contrax doesn't contact the hotel to get the rate error corrected. TRX has discussed adding a feature of this kind that would send an e-mail to the property, "but the difficulty is that the hotel contacts change so often it really takes a phone call to reach the right person," he said.

Historically, buyers or agencies conducted the auditing process manually. "This was expensive as well as time-consuming," Reynolds said. "When you've got hundreds of properties and multiple GDSs, it's just a big ordeal. Consequently, few accounts went through the trouble of thoroughly auditing the GDSs. They might spot check occasionally, but rarely audited the entire program."

As the use of corporate online booking tools grows, rate loading problems take on an added dimension. "The usage of online tools depends on accurate rates being loaded into the system. That was one of the reasons TRX got involved in the issue," Reynolds said. "Our online tool was ending up with questionable results. It all came back to the GDS, because the tool is only as reliable as the GDS data." TRX's latest online tool, Resx, was launched last month.

As for the issue of extra rates being loaded into the system, Contrax takes it into account; Eclipse Advisors' approach does not. "As long as the rates are tied to a rate-loading access code, they should appear in the first set of screens that an agent or traveler booking on an online tool sees," Richard said.

Sagastume attributed much of the rate-loading dilemma to the way hotels typically have handled the process. "There's always been a handoff from the sales end of the equation to the operation," he said. "Sales would say, 'Okay, we agreed to these terms and expect you to figure out how to load the rates.' There's just been a miscommunication."

For buyers looking to head off the whole problem, Richard recommended including specific guidelines upfront when the hotel program first is being negotiated. "That way, it's clear the responsibility is on the supplier to manage the process. Also, agree initially, even as part of the contract, which steps will take place when," she said. Still, there may be a need to audit. "As much as hotels infer they will do it correctly, in my experience there isn't a supplier whose rate loading hasn't elicited error messages."