Travel management company Egencia launched a dynamic hotel rate cap feature Thursday at the Business Travel Show Europe in London.
The product uses an AI-powered algorithm to automatically adjust caps for allowable hotel rates according to local market median pricing rather than a manual process. It also can be configured to adjust caps based on different traveler profile groups, such as senior-level executives, for whom higher rate caps might be allowed.
"In the market the past 18 months, two major trends have changed the life of the travel manager," said Egencia VP of multinational and global Manuel Brachet. "First, Covid made business travel a lot more complex, more volatile, with more restrictions and conditions. Supplier prices are changing all the time. Number two is companies have increasingly moved to having travel programs under one roof and mandating their employees book within the program to fulfill duty of care. That's happening against a backdrop of leaner travel management teams. Technology has an increasingly critical role to play to make the life of the travel manager easier."
Travel managers can turn the feature on in the Egencia dashboard. The tool aggregates real-time hotel prices in a specific location to identify a market median, then configures an appropriate price-per-night cap for any traveler booking a room in that city. Travel managers can customize the caps by specifying that only hotels with a minimum star rating are used in the calculation, for example, and can mix and match between dynamic and static hotel rate caps for specific travel groups.
There is no limit to the number of markets that can be included. Customers can choose to use it on its own or in conjunction with traditionally manually set rate caps. The dynamic rate cap function is available immediately and is included in Egencia's platform without an additional charge.
Egencia developed the feature in-house and piloted it with 15 customers in the United States, Canada and Germany from February to September 2021, and Brachet said the tool in the pilot drove about $20 in savings per hotel booking. Those users also gave feedback on the ability to configure dynamic hotel policy within the product, as well as how savings and policy compliance are displayed when the feature is activated, according to Egencia.
The product integrates with Egencia's analytics and reporting functionality, and it can show travel managers the median rate for a booking compared with the actual rate. Travel managers also can compare their travelers' booked rates relative to median market rates through January 2021 regardless of whether they activate dynamic rate caps, according to Egencia.