Hotel Rate Inaccuracy Abounds

Despite travel buyer and hotelier efforts this year, the accuracy of the hotel rates loaded into the global distribution systems has only slightly improved. Meanwhile, another chronic problem, the dropping of those negotiated rates, has grown increasingly troublesome in a buyer's hotel market.

Carlson Wagonlit Travel clients saw a slight uptick in rate-loading accuracy in the first round: 75 percent of rates loaded correctly on average, compared with 71 percent last year, followed by 90 percent accuracy on the second round, said Sherie Hermann, global project manager for CWT's hotel solutions group. "Hotels have done a better job because they're anxious for the business," she said.

Even with that improvement, many buyers are discovering that a good portion of travelers still are not getting access to negotiated rates even after they were loaded correctly. "The process is completely broken. I can't think of another word to describe this process," said Mike Boult, chief commercial officer for hotel sourcing technology supplier Lanyon, who in recent weeks shared the results of rate auditing for several clients with Business Travel News. Even in heavily managed and frequently audited travel programs, travelers were booking the wrong rates at preferred properties about 30 percent of the time, he said. "Even after four audits, the rates are wrong," Boult said.

With faster and more accurate rate-auditing tools available, buyers have been ratcheting up auditing efforts in recent years, said Bob Brindley, vice president of BCD Travel consulting division Advito. While the traditional pattern has been a three-step audit, more buyers are now switching to quarterly audits, he said. "When we launched newer technology a couple of years ago, the first thing we saw was an increase in the amount of discrepancies."

Cheryl Geib, director of the travel and meetings department for accounting firm Grant Thornton, said her company recently has switched to quarterly audits, and as a result, began to notice previously loaded rates dropping out. "In some instances, an entire brand would fall off and we wouldn't know why," she said.

In many cases, more discrepancies are a function of better monitoring, as buyers are uncovering existing problems, Brindley said. Rates are becoming more complex and must be loaded into multiple global distribution systems, leaving greater chances for error. In Boult's data, for example, some hotels' rates were loaded correctly in three GDSs, but not the fourth.

CWT's Hermann said buyers with complex programs should implement measures to improve accuracy. "They should have clear instructions so the TMC is able to take the multiple points of sales and locations and map them to one primary point of sale," she said. "Even though the hotels control the rate loading, there's ownership that needs to be done from the client and TMC side."

Michelle De Costa, global travel manager for technology services and consulting firm Sapient, said her travel program includes different booking tools and GDSs across different geographies. Due to the complexity, she this year turned to Lanyon for rate-auditing services. One specific problem that popped up stemmed from a dynamic pricing experiment the company is conducting with one hotel chain, in which travelers are getting 10 percent off the best available rate across the chain. Getting that programmed in the GDSs was a challenge, she said, and when that happened, the negotiated rates she had at a few specific properties within that chain were thrown out, she said. "In some cases, that's $50 or $100 more a night," De Costa said. "The loading part was a disaster."

Often, small glitches are at fault in dropped rates. Cheryl Benjamin, travel department supervisor for Michigan-based foodservice packaging provider Dart Container Corp., said she's seen problems with rate dropping in the past year caused by a change in hotel booking platforms. She also saw a rate drop one year because it was accidentally entered to expire at the end of February rather than the end of December.

"We had this wonderful rate for two months, and all of a sudden, it's gone," Benjamin said. "With the relationships we've had, it's never been a problem going back and crediting it as necessary."

Geib said she never pinpointed the exact cause of the drop, though it was corrected after it was identified. "Everyone was pointing, but nobody knew why it had dropped," she said.

Not everyone sees it as a pervasive problem. CWT's Hermann said her group has seen dropped rates only in "rare instances."

Buyers more frequently are turning to outside sources to audit loaded rates, but many still supplement audits with internal spot checks. Geib said a person on her team, when she has a free half hour, manually checks to see if rates are appearing properly.

Sapient's De Costa credited her travelers with uncovering some of its rate-loading errors. "Our people in the field know what those rates should be and know it's not showing," she said. "It's getting them to tell me it's not showing versus them calling the hotel."

Maintaining an online hotel directory aids that, Advito's Brindley said, enabling buyers booking a hotel to know not only the rate they should be getting through the GDS but also any additional amenities, such as breakfast or high-speed Internet, that should be included in that rate, he said.

At the Association of Corporate Travel Executives Global Education Conference in Chicago, Marriott International account executive Dave Alston cautioned buyers to be sure dropped rates were failures and not the result of their room types not being available. He said buyers should ask during negotiations what percentage of rooms might be eaten up by group demand. Brindley said buyers should understand a hotel's availability. "If you only have 25 percent of their standard rooms, last-room availability is not going to be that valuable," he said.

Buyers also are taking a harder line against rate-loading failures. Sapient's De Costa has removed three or four hotels from her program in the past few years that had difficulty getting rates loaded. "Not having the rate loaded is a deal-breaker," she said.

Buyers are more frequently auditing rates for hotels they solicited during negotiations but did not include in their programs, making sure those hotels did not load the rates anyway, Brindley said.

When uncovering rates that failed audits even after being loaded correctly, however, Lanyon's Boult said most buyers claim they don't have the budget to tackle the problem—and many still don't monitor after rates are loaded.

"You spend all that time and energy doing the work in negotiations, so I don't understand why the pitchforks aren't out," Boult said. "It's incumbent on both sides to get serious about this space."