Rate squatting might pose a bigger problem than usual for travel buyers after protracted negotiations left some properties out of 2011 hotel programs, but not before they loaded extended 2010 rates into distribution systems using buyers' global distribution codes. Still, some buyers reported success in resolving the puzzling challenge by using audits and targeting traveler behavior rather than pounding on the newly nonpreferred hotels.
While rate squatters provide travelers with lower-than-retail rates, they dilute volume at preferred properties and potentially make negotiations more difficult the following year, said Carlson Wagonlit Travel hotel solutions project manager Lisa Maloney. Travelers might be drawn to squatting properties that had been in the program in past years, as they might be familiar with those hotels.
For hotels not chosen by buyers to be in 2011 programs, "it's easy for them to have amnesia," said Bob Brindley, vice president of business development for BCD Travel consulting division Advito. "Lots of hotels will try to make sure those properties that weren't selected are pulled out, but if they [have low occupancies], it would make sense for them to leave them in."
[PULL_1]This compounds what already was a severe problem with rate squatters for some buyers. At Business Travel Media Group's Travel Management 2011 conference in December, one large-market buyer said that as he began to examine squatters, he found 150 Atlanta-area hotels listed in the GDS for his company, which he said has only three preferred hotels in the city.
"You could be making the change management process even harder to implement," Brindley said. "It creates ambiguity and opens the door for noncompliance."
A formal audit is one line of defense against squatters, checking not only that preferred rates are loaded properly but also that rates from rejected hotels are removed. "Typically, where we see squatter rates, hotels don't blindly throw them out there," Brindley said. "They put them in place as part of the bid and only rarely if they weren't invited to the bid."
One-quarter of 116 travel buyers polled last fall by Carlson Wagonlit Travel indicated they planned to use GDS audits this year to optimize hotel spend. According to the travel management company's report, auditing GDS rates ("including auditing for rate squatting") can help shave a percentage point from total annual hotel spending.
CWT's Maloney said auditing twice for squatters is a common practice, but that figure varies by the program's size, and suggested buyers confirm in writing from rejected hotels whether rates were pre-loaded.
[PULL_2]Buyers concede that they'll never fully clear all squatters from their GDS channels, particularly in massive hotel programs. Even after audits, Sybase senior purchasing manager Patricia Carlin must deal with squatter rates that appear in the company's online booking tool. "Sometimes travelers will contact me just to ask if they can use the hotel," she said. "When I discover it, I don't contact the brand person; I have the online booking tools remove it."
Others agree that the online booking tool is the best way to tackle squatters through its ability to delineate between hotels that are actually preferred and those that simply have had rates loaded. "Booking channels, be it the online booking tool or the agency, should know the preferred hotels," Maloney said.
And travelers should book rates from those preferred properties; higher compliance can help nullify the rate-squatter problem. "Make sure you communicate what you're expecting, manage it, check it and make sure the booking tools and the agency are being used," Maloney said. "The key is to have good relationships and also to manage your program."