How to Negotiate Better Corporate Hotel Rates
Hotels and other accommodation expenses usually take a considerable chunk of a company’s travel budget. To cut back on these costs, travel managers actively look for ways to get the best deals and secure the most affordable rates. One effective way to reduce accommodation costs is to broker corporate rates with hotels. In this guide, you’ll learn how to negotiate better corporate hotel rates, the best times to negotiate deals, and the strategies you can use to acquire discounts.
What Are Corporate Hotel Rates?
Hotel rates may be on the rise, but that doesn’t mean your company has to cover the entire cost. It is important to note that business travelers spend 30 to 50 percent of their travel budget on hotels. This means getting hotel discounts can turn into significant savings for your company.
The good news is that many hotels and hotel chains prefer to rent their rooms rather than leave them idle, which doesn’t earn them any money. You can take advantage of opportunities like this to gain corporate negotiated rates (CNR).
CNR refers to the amount hotels charge their guests who travel for business, which is usually lower than the regular rates. This is also known as rack rates or door rates. Rack rates are the prices you’ll find posted on a hotel’s website, and they’re often the highest price they will charge guests.
How Do Corporate Negotiated Rates Work?
So, can you negotiate hotel prices? You can negotiate corporate rates beforehand to reduce company travel costs. Your travel manager needs to contact the hotel manager or booking director directly to work out a deal.
Corporate rates are computed based on the room nights per annum or business volume you have accumulated. This means the more your employees frequent a hotel, the bigger the discount you can get. The discounts hotels can give you usually start at 10 percent.
However, if you shop around and guarantee loyalty and more volume, you can get more discounts. Apart from reduced room rates, you can receive perks like add-ons, free nights, loyalty points, and flexible cancellation policies.
How to Negotiate Better Corporate Hotel Rates
There are several considerations when sourcing corporate negotiated rates. Negotiating CNR can sometimes be time-consuming and complex, but your company can save more money if you go the extra mile. You will get tremendous potential savings, and your employees can enjoy additional amenities and other perks.
There are a few things to keep in mind to get a better footing on the negotiating table:
Speak Directly with the Hotel Manager
It’s vital that your travel manager speak directly with the hotel’s manager, guest relations representative, or booking director. These decision-makers can discuss issues and terms during negotiations, allowing you to demonstrate how your business is an ideal fit for their needs.
Understand Your Travel Budget First
Can you negotiate hotel prices if you don’t understand your travel budget? It’s important to know your company’s travel spending trends. Perform regular audits and gather enough data to understand how money is being spent. Find out which cities your team travels to frequently and which hotels they prefer.
With this information, you can project how much volume booking you can commit per annum. Compare your annual data to your recent hotel data to confirm the information you have gathered. Use what you found out during negotiations.
Don’t Be Afraid to Negotiate
During negotiations, it is best to highlight the benefits of establishing business relations with your company. Mention the volume of business and booking frequency you can offer. Make sure to go through the fine print of your agreement and discuss any costs associated with your CNR. You can avoid many unpleasant surprises if you discuss taxes, tariffs, and other charges with the manager during negotiations, not when the invoice arrives. Finally, keep communications open and friendly, ensuring good working relations.
Eligibility
Hotel managers will check if your company is eligible for corporate rates, which will usually be based on the amount of business volume you have generated. Every hotel will have different minimums, but if you want to be in an excellent position to negotiate a better CNR, you need to commit to booking an average of 100 stays annually on average.
However, negotiating with major hotel chains requires more business volume. You need to accumulate a minimum annual stay of 250 nights. This setup can work well for large companies with many professionals traveling yearly.
However, smaller companies that don’t have enough volume might find it difficult to impress significant hotel chains. It is best for these organizations to negotiate with small independent and boutique hotels. You can create a strong impression with as few as 50 nights per annum.
Exclusivity
You can negotiate for better CNR even if you haven’t accumulated enough volume in exchange for loyalty and committing more bookings. Again, this can only work on smaller and independent hotel chains. Doing this will help you work your way toward eligibility. With this strategy, you’re ensuring customer loyalty in exchange for more affordable accommodations.
Perks
Expect some pushback from hotel managers since they, too, need to consider their company’s profits. Meet them halfway, and you can work out mutually beneficial agreements. If you can’t drive lower rates, you can ask for additional perks, such as complimentary breakfasts and other add-on services.
Extended Stay Discounts
Some employees need to stay over five nights during a business trip. In such situations, make sure to ask for extended stay discounts. It’s common practice among many hotels even though you won’t find them advertised on their official websites.
Consider the Time of Year When You Book Rooms
The time of the year when you book rooms for your team can also help you secure better room rates. Booking rooms during the off-peak season can improve your chances of negotiating better hotel room rates since hotel managers want to fill rooms to get more business.
Timing your bookings will be crucial. Studies show that booking rooms 15 days before your departure date gives you access to rates up to 13 percent lower. The savings go up to 22 percent for luxury hotels. However, if you’re trying to get better room rates in popular US destinations like Miami, it is best to book two to three months ahead to get the best rates.
Loyalty Programs and Corporate Credit Cards
Ask about the hotel’s loyalty programs and how your employees can qualify for free stays, rewards, and discounted rates. Ask about discounts you can get using business or corporate credit cards. Business credit cards can be costly to acquire from credit card providers, but they can save money when used correctly.
Work with Seasoned Corporate Travel Agents
As you learn how to negotiate better corporate hotel rates, it is best to have expert advice as you work out deals with different hotels. CI Azumano is a corporate travel agent with many years of experience negotiating the most competitive corporate negotiated rates for our clients.
Do you have preferred accommodations and hotel chains? Please fill out this contact form, and our specialists will be happy to assist you in negotiating deals, helping you qualify for corporate rate eligibility, acquiring company volume guaranteed rates, and reducing annual travel costs.