Successful hotel programme negotiations require a solid distribution framework to generate savings. Your hotel programme must remain under your full control and what happens in GDSes requires specific attention with adapted actions.
One of the main aspects of this distribution control is to monitor and check suppliers' behaviours and ensure they respect their commitment towards your company. Four key questions can drive buyers to achieve this goal and answering positively to all of them will be key to avoiding anything that could go wrong.
1. Are my rates loaded?
First and foremost what you have negotiated must be properly loaded. This basic must-have of any successful hotel sourcing process is actually still too often missed as being one of the most important steps. What would be the point of spending months in supplier negotiations if you don't get what you bought?
Overall rate loading by suppliers has become better over the years, thanks to more automated systems and improved supplier behaviour. However initial audits after sourcing continue to present, on average, a quarter to a third of rates non- or wrongly loaded. It may take two to four chases of non-compliant suppliers and additional audits to reduce this share to less than 5%. This goal should be the target for any consistent hotel programme in order to maximise its impact.
The end of the sourcing process is the most important period to conduct GDS rate loading audits. In case of two-year deals, audits are also essential right after the end of the first contract year because industry systems may not correctly support this duration from the start and suppliers then need to reload rates that remain contractual.
2. Are my rates available?
You now know your rates are correctly loaded in GDS. That's one step further towards an effective distribution framework of your hotel programme. Given the current environment of strong occupancy markets and room demand exceeding supply in the majority of business travel destinations, you now need to ensure these rates are available often enough for your travellers to book them.
Negotiated rates remain subject to availability; they will not necessarily be available anytime. The property could be fully booked and therefore rates will not appear in the system for bookings. Rates may also not be with a last room availability or there can be some black-out periods because of trade shows or other local specifics. Altogether your negotiated rates can sometimes be unavailable but when there is no other specific reason for it, hoteliers must comply with the contractual rates you agreed together. For a mature programme, an acceptable availability would be around 75% per month (on weekdays only).
To regularly verify that rates are available enough and in line with suppliers' commitments, you can conduct an availability audit to strengthen your control on the hotel programme. These are also part of the key to generating the expected savings from the sourcing process; availability audits give you the ability to anticipate and reduce the impact of suppliers' yield tactics.
How would it work? The audit will verify over a large period of time, for all weekdays and ideally at multiple times of the year, if the negotiated rate could be booked and is available. With a significant panel of dates, you will be able to consider if some rates present an overall lack of availability or even identify if some destinations are subject to availability issues on some specific days of the week. Making some minor adjustments to the programme could lead to better availability, therefore improving savings and traveller experience.
3. Are my rates not polluted by squatters?
Congratulations, your negotiated rates are now loaded and available for bookings by your travellers! You are now sure that part of your hotel programme is correctly distributed via GDSes. One last step of the GDS audits remains; it is important now that you know what should be there is valid and verify that your rates are not 'polluted'.
The technical complexity of GDS hotel distribution means that some rates are identified as part of your programme when they should not be. This could come from previous preferred suppliers who did not correctly clean the records when they have not been selected anymore. Of course, sometimes, it can also come from bad supplier behaviour who will try to load rates that have not been accepted, as such.
What is the big deal if they generate more savings vs. public rates if they are used? This may actually generate more missed savings for your programme. But these additional unexpected rates, by being displayed as preferred in your various booking channels, will divert booking volumes from selected suppliers. As these rates have not been reviewed and validated, they may first be more expensive than the real ones in your programme. Moreover you will lose negotiating power with actual preferred suppliers.
Last but not least the real issue is not with cost and savings in this case: travellers may see some properties that have not been reviewed from security or traveller comfort perspectives. Every travel manager or buyer should keep in mind that hotel programmes are there first to ensure traveller safety and to propose the right selected staying locations. This reason only justifies the relevancy of such audits at least once a year to identify squatter properties on your programme access codes.
Let's rewind: your rates have been checked as being loaded, available and not competing with unexpected rates as part of the validated hotel programme. From there you have made everything possible to ensure this programme is perfectly distributed in the GDS.
But is that all? Despite GDSes being a key component of most hotel distribution frameworks for corporates, an additional layer has either been added on top of or even replaced this key channel. If your travellers must book their hotels in an online self-booking tool, further verifications can lead to an increased control for your distribution.
4. Are my rates properly reflected in online tools?
If your hotel distribution chain is built with an online self-booking tool plugged onto one or multiple GDSes, the completion of all the above checks should enable the tool to display your programme as it should be. However additional checks can be relevant to ensure that tool settings are ideally configured. In addition to the usual reviews of purely technical codes, such as corporate access codes or pseudo city codes that will ensure the tool is rightly linked to your own negotiated rate list in GDS, some further optimisation can lie into more specific adjustments.
Multiple tool capabilities can be reviewed and improved to maximise savings and booking experience, from the way travellers can search for hotels and associated rates to the way your rates, and negotiated preferred ones, are displayed and listed. The audit of your booking tool settings will require you to be specifically adapted to your own context, the tool and environment you implemented, and above all your corporate strategy and goals.
Once this has also been done, you can consider your hotel distribution framework has being optimised and your negotiated rates should be perfectly distributed from the supplier to your travellers. Your corporate rates are loaded as they have been negotiated, they are available for bookings as often as they should, they are not polluted by any unexpected rates, and they are perfectly reflected in the final booking system.