News & Events

Mar 15th, 2017 News

Joint GBTA/HRS Research Initiative: Corporate Hotel Programs Too Often Don’t Get the Rates They Negotiated

New HRS Rate Protector service automates audits, drives accuracy and transparency

Cologne, 16 March 2017 –In partnership with HRS, GBTA Foundation, the education and research arm of the Global Business Travel Association, conducted a global survey of travel managers to ascertain the industry-wide prevalence of loaded hotel rate inconsistencies. The survey, which is ongoing, focuses on the accuracy of hotel rates and the frequency with which travel managers perform rate audits.

 

Continuous rate audit rare amongst corporates

With 200 respondents so far, the GBTA survey results reveal that only a fraction of companies check on the accuracy of hotel rates on a frequent basis.

  • Two percent conduct a rate audit on a weekly basis, seven percent do so monthly.
  • The rest of the companies only check every couple of months (22%), once a year (31%) or every time the rate is loaded (33%).

The GBTA survey also shows little consistency when it comes to how often discrepancies between the negotiated hotel contract and the rate (including amenities) appear in the system. Among travel managers performing audits:

  • 33 percent find discrepancies more than 20 percent of the time;
  • 30 percent find discrepancies 6 percent to less than 20 percent of the time; and
  • 37 percent find discrepancies 5 percent or less of the time.

Travel managers vary greatly in their approach to rate audits, according to the survey. About one-half (48 percent) audit rates internally through manual work. 40 percent rely on their travelers to report erroneous rates. Others trust reports from third parties, such as their travel management company (TMC, 30%) or the hotel supplier (19%).

A data analysis by HRS shows that corporate travel programs frequently don’t get what they negotiated in hotel procurement. One quarter of more than 23,000 rates analyzed in the review were incorrect or failed to correctly incorporate amenity details. And 11 percent of the rates analyzed were higher than originally negotiated between the company and the specific hotel.

HRS, which works with more than 40,000 corporate hotel programs and 350,000 hotels worldwide, leveraged its unique cumulative data to perform the rate data analysis in April and May 2016.

 

New HRS Rate Protector Catches Hotel Rate Errors, Initiates Correction

HRS now offers Rate Protector, a new service which automatically audits rates and amenities, helping both travel programs and hotels avoid costs. Should the check reveal a mismatch between loaded rates and negotiated parameters, a correction process is triggered and the hotel is notified to check on the rate. Erroneous rates are not displayed to the booker.

HRS introduced Rate Protector at last week’s Corporate Travel Forum in Berlin, the German edition of HRS’ global corporate travel event series. Rate Protector is an exclusive offering for HRS hotel sourcing clients.

 

Erroneous Rates – Regardless of Cause – Drive Extra Costs and Inefficiency

In hotel sourcing, the request-for-proposal (RFP) phase and contract negotiations are followed by loading the dates into the global distribution systems (GDS) and the booking systems used by travelers and travel agents. Due to a lack of industry standards (like varying room categories), different systems and human error, it can come to deviations between the agreed values and the data which ends up in the company’s booking tool. Higher rates drive costs in eleven percent of the cases, as the HRS data analysis shows. What’s more, on average, the erroneous rates were 14 percent higher than agreed upon. A missing breakfast inclusion or breakfast at a higher cost than negotiated appears in 16 percent of the analyzed bookings.

“Travel managers invest a lot of time and resources into negotiating room rates and amenities with hotels. This effort is only worthwhile when the negotiated rates and services are available to the traveler,” says HRS CEO Tobias Ragge. “The results of the analysis show that rate audits are more important than many corporates might realize today.”

 

About the studies: For this evaluation, HRS analyzed more than 23,000 corporate rates of 32 multinational corporate clients in April and May 2016. Chain and independent hotels both made up half of the analyzed portfolio.

This global survey was conducted online by GBTA Foundation, in partnership with HRS, among travel buyers on a rolling basis. Responses came from GBTA members, affiliate organizations, and HRS clients. Currently yielding 200 total responses, fielding efforts in North America and LATAM will continue through April 2017. In order to participate, travel managers must have at least “a little” responsibility when it comes to negotiating, loading, or verifying hotel rates and contracts for their organization.

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HRS – Global Hotel Solutions

HRS makes business travel easy. Companies and corporate travelers around the world look to HRS to find optimal hotel accommodation and to simplify the travel process. From booking the best rates to payment and annual sourcing activities, HRS provides end-to-end automation and consultative services to more than 40,000 companies. HRS is also the world’s largest hotel content provider, offering five million rooms in 350,000+ hotels in 190 countries, all seamlessly available to business travelers and travel agents through all global distribution systems and online booking tools. HRS helps balance corporate hotel programs with unmatched access to independent hotels – which make up more than 70 percent of the world’s hotel supply. Our aim - realize savings for the corporations and increase traveler satisfaction.

Launched at its headquarters in Cologne, Germany in 1972, HRS today has 1,600 employees in 28 offices worldwide, with regional locations in London, New York, São Paulo, Shanghai, Singapore and Tokyo. Further information at corporate.hrs.com