Saving money is always a priority, whether you’re in Procurement, Finance or just an everyday person traveling on business. That’s why I thought it would be a good idea to write about the importance of a corporate accommodation rate.
Firstly, what is a corporate rate?
A corporate rate is an agreed rate for a certain period of time based on a pre-agreed number of bed nights or spends in a specific location- this is a fixed rate and does not increase in line with the other flexible rates the hotel is selling. This could be, for example, an agreed accommodation rate including breakfast or dinner in a regularly used location.
When booking accommodation, it’s not a secret that prices and terms vary drastically from one minute to the next. The rate you are offered from hotels and websites depends mainly on the location you have selected and the availability within the area which causes headaches when trying to manage travel costs and company budgets.
Why do normal booking rates vary so much?
I have tried to outline a prime example of this; Employee 1 books a room @ £75.00, that afternoon Employee 2 books the same hotel for the same dates @ £95.00, the following day Employee 3 books the same hotel and same dates @ £120.00 the explanation of this by the hotel is that the demand for the rooms has gone up hour by hour and day/day and they now have fewer rooms to sell pushing the price of the rooms up. Massively frustrating for the budget holder and the manager of the department as costs cannot be controlled.
How can a Corporate Rate help?
In the above situation a corporate rate could help massively. For example, a set rate of £75.00 B&B can keep all bookings at the same rate, whatever time of the year you are booking subject to the hotels “availability and terms”. The rooms can be honoured for a higher percentage of their available room stock and your employees can take advantage of knowing that in most cases this is the rate that they will be offered, the managers and budget holders are happy as they can now report and review the spend and forecasts are more aligned to actual figures.
How much money can be saved?
If you set up a corporate rate, which more or less guarantees you an agreed rate each time you book, then the cost savings that can be made are fundamental. By setting up a corporate rate for one of our clients we managed to save them £54,770 which was a reduction of 23.59% on their previous year’s savings.
So why doesn't everyone do this?
The only downside to setting up a corporate rate is that it can be time consuming to do as you often need vital statistics and proof of previous bookings prior to the venue confirming a rate. Also, it's often difficult to get through to the most relevant person within the venue to set up a rate, especially if they are used to dealing with larger companies with bigger budgets! As Hospitality Guaranteed will often already have the statistics and contacts required, a corporate rate could be agreed quickly and securely for you. If you would like to chat to us regarding setting up a corporate rate, give us a call on 0844 8223227 or drop me an email: emma@hospitalityguaranteed.co.uk
Emma Hall
