Two recent studies highlight the importance of regular hotel
rate audits so corporates can reap the full benefits of their negotiated
programs. Still, the industry has a ways to go in terms of embracing regular
rate auditing.
In an analysis of hotel rate auditing programs used by its
clients, BCD Travel found that a company that doesn’t conduct standard rate
audits will overspend on its hotel program by $122,500 for every $5 million in
spend. Combining standard rate auditing—the industry norm that checks that a
rate is loaded properly into the global distribution system—with rate
availability audits can prevent $225,000 in overspending for every $5 million
in spend.
Yet, while about 80 percent of BCD clients conduct standard
rate audits, according to Marwan Batrouni, senior director and hotel practice
area leader for BCD’s Advito consultancy, only about 30 percent of clients have
opted for monthly rate availability audits.
Another recently wrapped study,
from the Global Business Travel Association and HRS, found that while 86
percent of travel managers conduct a GDS rate load audit, only 6 percent check
rates on a monthly basis and another 4 percent check rates weekly. The study
concluded that one in every six hotel contracts is incorrect owing to
discrepancies in rate, room type, amenity or cancellation policy. Those errors
contribute to corporates overpaying by 14 percent in their negotiated hotel
programs, the analysis found.
Batrouni said that although the proportion of corporates
that conduct regular audits is less than ideal, more companies are seeing the
value in auditing. "We've come to a point where we've been able to help
clients realize that unless they're doing it on a constant basis, at least the
rate availability, then hoteliers can really kind of revert back to what's
comfortable for them, which is to have full control of their inventory,"
Batrouni said. "Unless someone is monitoring and reminding the suppliers,
'We're watching you,' then things can really go haywire."
As for why a well-tread topic like hotel rate auditing is
getting more attention now, Batrouni pointed to increasingly sophisticated
revenue management on the side of the hoteliers, as well as the growing ease
and affordability of auditing technology. That second piece is key to improving
auditing practices overall; the GBTA/HRS study found that 42 percent of
corporates that don't audit say it's because they have no internal resources to
do it and 16 percent say have no budget to outsource auditing.