Question Time MONEY! SHOW ME THE
Welcome to Question Time, in which an industry expert tackles your business travel concerns. This time round, Simone Buckley answers queries about getting the best choice and rate of hotel
Q. A.
Simone Buckley CO-FOUNDER AND DIRECTOR OF TRAVEL PROGRAMME OPTIMISATION, BOUDA Simone has a wealth of experience in the business travel industry spread over 18 years at TMCs, across operations, account management and sales and marketing. She has both national and global experience from the senior posts she held at Carlson Wagonlit Travel, HRG and Rosenbluth International. Before setting up Bouda, she was MD at Capita Business Travel.
HOW can I ensure the best hotel choice for our business is
selected via our hotel booking agent given a budget hotel that does not pay commission or over-rides might be included in the options?
TO clarify the point here, on a £100 a night room, assuming the
hotel pays ten per cent commission, the true cost to you is really only £90. On a £100 a night room at a budget hotel where the commission isn’t paid your actual cost is £100. At the time of booking they both looked equal but the reality is that there is a £10 difference. Did you know that similar issues
" Ideally, you would have a transparent price presented to your booker at the point of sale that discloses the commission earning"
occur with hotels varying how they display their room rates on the GDS with regard to VAT? Some hotels load them inclusive of VAT and some load them exclusive of VAT. It can therefore quite easily look like one hotel is cheaper than the other if you don’t read the small print. There are two commercial agreements common with an HBA: 1. All commissions and overrides are used to offset the cost of the HBA service; 2. The service fee is minimal (sometimes £0), but the HBA keeps all of the commission it earns and this is undisclosed to the customer. Ideally, you would
have a transparent price presented to your booker at the point of sale that discloses the commission earning and would present a true net-net comparison. I am not aware of any HBA booking tool that
discloses the commission earning per room per night at the point of sale. This would be the solution but unfortunately it isn’t quite that simple.
Most HBA contracts state that they
will return the amount of commission 'received' by them rather than 'owed' to them. This means that if, for whatever reason, they are not paid by a hotel supplier the commission that they are owed, they don’t have to return it to their customer. Because of this they are unlikely to commit to a commission return at the point of sale. Trevor Elswood, managing director at
BSI, recommends that you look closely at the booking tools and system architecture of your HBA, which should provide some comfort around their ability to meet your commercial needs rather than their own commercial needs.
compared to the likes of
lastminute.com?
Q. A.
SOME HBAs and TMCs will offer a 100 per cent rate guarantee
where they honour any market rate on like for like terms. This demonstrates the strength of their commercial agreements with the hotels. Use your own negotiating power with your preferred hotels to also get a 100 per cent rate guarantee directly. A word of
HOW do I know that my negotiated rate stacks up
caution though – over 30 per cent of bookings are amended and cancelled, so often the rates available from the likes of
lastminute.com are not commercially right in the wider picture.
data supplied by my HBA or TMC?
Q. A.
THERE are various avenues for benchmarking such, as PwC and
TRI Hospitality, but these look at both leisure and corporate data so can only give a flavour of what’s happening. You should benchmark your perform-
ance and average room rates against your previous year’s data and against city room rate increases. Some companies choose to have one
HBA or TMC as their booking service provider but use an alternative HBA or independent specialist for negotiating their annual hotel programme. Taking advice from more than one company can be very insightful.
IF YOU have a business travel issue you would like advice on from an expert, just email us at:
help@thebusinesstravelmag.com
HOW can I really benchmark hotel rates, and not just by the
14 I THE BUSINESS TRAVEL MAGAZINE
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