Should you negotiate a fixed price with hotels?

[fa icon="calendar"] 02-Dec-2015 12:33:00 / by Jack Donaghy

Jack Donaghy

Many of our customers travel regularly to the same locations and indeed to the same hotels and therefore will have entrusted Roomex to ensure that they get the best possible rate each time they visit. This raises the question as to whether Roomex should negotiate a fixed rate at a hotel for you?

And the answer… yes, sometimes.

Firstly, a client typically has to have at least 100 room nights per annum at a hotel to get a negotiated rate. By agreeing a fixed price at a hotel you can guarantee that you will have access to that rate all year round and there will be no surprises. Often business rates are negotiated to include breakfast, Wi-Fi and sometimes even dinner. When the hotel is busy then this rate will be a guarantee against rising prices. Whilst every hotel revenue manager amends prices to ensure the highest possible occupancy and rate, there will inevitably be times when the hotel is not busy and prices start falling, sometimes below the negotiated rate.

The key here is having the data to measure the strength of your negotiated rates against the fluctuating rates of the hotel. Our live price-checking software within the Roomex for Business platform provides this on an ongoing basis. We are measuring and tracking two things – firstly, the actual saving, and secondly, the strength of your negotiated rates, tracked over time.

Best practice is therefore to have negotiated rates for those hotels where you will have a significant number of room nights, but we must always measure and track the strength of these over time. A very successful alternative often is to have a fluctuating rate with a fixed discount off the Best Available Rate and even though the rate will vary, the average can be significantly better over time!



Topics: Hotel Contracting, Corporate Travel, Cost Savings

Jack Donaghy

Written by Jack Donaghy