Managing hotel rate rises is all about policy

27 Feb 2017

Jess Anscombe

General Manager - Corporate Traveller Australia

Do you know how much you spent on hotel rooms in 2016?

If you're looking to reduce your accommodation spend in 2017, the Corporate Traveller team has discovered some interesting trends you should know about.

Our partners at 4th Dimension Business Travel Consulting  forecast Average Room Rate (ARR) increases of seven per cent in Sydney and six per cent in Melbourne.  You'll also be against a seller's market in Hobart, the Gold Coast and Cairns with increases of up to five per cent.

Brisbane will remain the most affordable major market on the east coast, with increases of three per cent after a 10 per cent drop in ARR last year.  Perth and Darwin will also rise incrementally after price drops in 2016.

With hotel occupancy at around 80 per cent, limited supply and upcoming events such as the Commonwealth Games, this means rates are unlikely to stop climbing in the medium term.

The stronger markets show no sign of slowing down in the long term either, so regular travellers to Sydney and Melbourne should start exploring ways to alleviate the rate climb.

Your first step should be consolidating hotel suppliers for rate negotiation.  Conditions will vary depending on the property but if you book more than 100 room nights per annum, entering the negotiation process can help shave some valuable dollars off ARR.

If you're not going to make the room night quota, it's time to give your accommodation policy a review.  Targeting low hanging fruit is the best way to give your bottom line a boost and avoid the frustrations of major overhauls in policy or processes.

Is the Executive King Suite really needed for an overnight stay?  Probably not, so switch to cheaper room types.  

Using a best rate of the day policy is also an easy solution, particularly if you can plan ahead and purchase in advance. 

Other policy changes like switching to room sharing for multiple travellers and taking advantage of hotel loyalty programs will help increase the value of each stay.  

Don't forget, using a Travel Manager to administer your bookings gives you a valuable leg up in obtaining refunds on unused room nights and waivers on last minute cancellations.

 

Are accommodation costs blowing your travel budget?  Contact us below for a better spending strategy.  You can also connect with Jess Anscombe on Linkedin.

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