How to Negotiate Corporate Hotel Rates?

There is no denying that business travel plays a vital role in the growth of an organization. 

With the business travel market expected to reach approximately $1.4 trillion by the end of 2024, managing your company’s spending is also crucial. While business travel spending covers numerous things, one area that requires serious attention is accommodation costs. 

Hotel booking, a task that often falls on the shoulders of travel managers and employees, can be a daunting challenge in getting discounted corporate hotel rates. The quest for the best and most comfortable accommodations can be time-consuming and complex. Navigating multiple websites and searching for the perfect hotel is not always the most efficient or reliable method. 

Business travelers spend 30-50% of their business travel costs on hotels and accommodations. This is exactly where negotiating for corporate hotel rates comes into the picture. Hence, this blog will help you understand the art of negotiating for the hotel rates. 

What are Corporate Hotel Rates?

Business travel has increased over the last few years, and hotel rates have risen. Hence,  it is crucial for organizations to negotiate with hotels for the best fares while booking. Understanding corporate hotel rates is key to this. These rates refer to negotiated or discounted rates offered to businesses or corporate clients who frequently book accommodations for their employees, clients, or associates. 

These rates are typically lower than standard room rates and are part of a corporate agreement or contract between the hotel and the company. The specifics of hotel fares can vary widely depending on the hotel chain, prime location, season, and the terms negotiated between the hotel and the corporate client. 

Hotel corporate rates are based on agreed-upon codes, discounts, and terms. Certain hotel chains might restrict these discounts during busy seasons or weekends. Employees may still be eligible for these centralizing discounts even when not traveling for work. However, travel managers must negotiate all terms to maximize benefits and reduce hotel booking expenses for the organization.

1. Negotiated Rates: Hotels and businesses negotiate corporate rates based on factors such as the volume of bookings, the duration of stays, and the potential for repeat business.
2. Benefits for Businesses: Corporate hotel rates can provide several benefits for businesses, including cost savings, streamlined hotel booking processes, and access to consistent and reliable employee accommodations.
3. Customized Packages:  Besides discounted room rates, corporate agreements might include other perks or services, such as complimentary breakfast, Wi-Fi, meeting rooms, airport transfers, or access to fitness facilities.
4. Booking Process: Businesses with corporate agreements often have a dedicated booking process, including direct communication with the hotel’s sales or travel team, an website for hotel bookings or a specific booking code.

How Do Corporate Hotel Rates Work?

If you are a travel manager who handles your employees’ travel and is excellent at negotiating, getting the best hotel rates can be a breeze. You can get the best corporate hotel codes or discounts days/months before the employee’s business travel begins. This way, you save huge chunks of money by getting the best deal. 

Hotel corporate rates are calculated based on the negotiated agreements between the hotel and your company to get discounted rates and special terms for a group of business travelers. If your employees travel frequently and stay at the hotel for many nights, you can claim discounts or deals for that duration. 

Hotels also recognize the needs of corporate customers and offer exclusive codes, discounts, and deals, which usually start at 10%. Some hotels also offer loyalty programs. By registering for these programs, you can avail of other hotel rates, which also come with extra perks. By exploring these options, you can get the best hotel deals and discounts. This helps you save money without compromising on quality.

8 Tips for Negotiating Corporate Hotel Fares

Let us see the seven useful tips to negotiate corporate hotel rates:

1. Do a Self-evaluation 

The first step toward getting a great hotel deal is to know your travel spending trends. Evaluate your recent business travel data and identify the cities where most of your travel happened. Project how many room nights you will have, what the revenue is, and the total purchase based on the volume you will likely purchase in the year ahead. 

Some hotels offer differential rates for multi-occupancy. It is essential to negotiate a multi-occupancy rate carefully. Pay extra attention to hotels where multi-occupancy is likely: E.g., a hotel where your new hires stay. Double occupancy rates are often provided at a marginally higher rate than a single occupancy rate.  You can also ask the hotel whether you can accommodate another person in a single-occupancy room. If yes, what are the charges and services included? Once you have this baseline, examine your recent corporate rates for hotels. You can negotiate effectively with the correct set of business travel hotels.

2. Check Whether the Hotel Offers CVGR Rates

Most hotels dynamically change their rates daily. You must have seen hotel rates rise dramatically during the New Year’s holiday. These variations respond to changing occupancy, seasons, and several other factors.

In the US, there are two types of rates: discount on BAR (Best Available Rate) rate model and fixed rate. For example, 100$ or 200$ per night. While this model offers a discount on the standard BAR, it is more variable and can change based on the hotel’s pricing strategy. 

On the other hand, many hotels also offer a Company Volume Guaranteed Rate (CVGR)—CVGR is essentially a type of fixed rate. Still, it’s tied to the volume of bookings a company commits to. As the name suggests, hotels inevitably reward companies with fixed corporate rates and maximum business hotel discounts as companies consistently give them business.

Check with the hotel to see if they offer a CVGR rate. Even if the hotel doesn’t provide this rate plan, remember to check for corporate hotel rates using the dynamic rate. You can maximize the discount you get by guaranteeing room nights to a hotel.

3. Negotiate with Multiple Hotels

Once your hotel list is ready, it is time to identify alternates and select the right option. Most great hotels have a reasonable alternative in the same area. Business travelers often feel pressed for time and need to take advantage of such options.

When negotiating business hotel discounts, write to your preferred hotel and the alternative. This would help you quickly benchmark not just hotel rates & corporate hotel discounts but amenities and other inclusions. As negotiations progress, the corporate hotel rate information from the alternative is a good bargaining tool to extract the most value.

Another way to efficiently negotiate with hotels is by onboarding a Travel Management Company (TMC). This is because advanced TMCs like itilite have a team of experts who can help you conduct market research, collect the required data, and negotiate with the hotel vendors to get the best corporate rates for corporate hotel rates. If you want the experts to talk to you, contact us now.

4. Ask About the Cancelation Window

Your deal negotiation journey isn’t over yet. Business travelers cancel much more frequently than others. A favorable cancelation window is an important clause to include in the deal.

You can cancel a hotel booking without being charged within the cancelation window, which is the time limit before check-in time. Ask the hotel about the cancelation window they offer. Most hotels are likely to offer a 48-hour cancelation window.

However, you can negotiate the cancelation window to a 12-hour window, especially if you guarantee room nights to the hotel.

5. Enquire About the Retention Charge

The next order of business is to negotiate a retention charge. The hotel levied a retention charge for cancelations outside the cancelation window, no-shows, or early departures. Please ask the hotel about their retention charges and associated terms and conditions.

Most stays charge a one-night tariff on corporate hotel rates as retention charges.

If the retention rate is higher, negotiate it to a more favorable charge.

The travel management platform will significantly reduce your travel spend by helping you secure negotiated rates at hotels. To assess your present travel and expense management system, take a look at our T&E health calculator below.

6. Check for LRAs

Last Room Availability (LRA) is a contractual agreement between a hotel and a corporate client or travel management company. It ensures that the agreed-upon rate will be available for the last available room in the hotel. Even during peak occupancy periods, as long as a room is still available for sale, the client can book it at their negotiated LRA rate.

Secure the Last Room Availability (LRA) rate even when occupancies are high and room categories are limited. While LRA rates may be slightly higher than non-LRA rates, they offer peace of mind in high-demand areas, ensuring you get the room you need when you need it most.

7. Look Out for Black Out Dates

Blackout dates are specific days or periods when certain discounts, promotions, or special rates do not apply. These dates are typical during peak travel times when businesses anticipate higher occupancy or sales and limit or exclude offers. Encourage the hotel to disclose the planned blackout dates so you can plan more effectively. Remember that negotiated rates won’t be available during these blackout periods.

8. Check for Add-on Services

The rate offered also varies based on the add-on services included. While negotiating the deal, please inquire about the included add-on services. Corporate hotel rates may consist of the following add-on services –

• Airport pick-up and drop service
• Late check-out timings
• Boardroom usage
• Laundry services

You can drive a harder bargain and create additional savings by preceding some or all of these services.

What are the Advantages of Corporate Hotel Rates for Businesses?

Hotel corporate rates offer several advantages for businesses, making them a valuable tool in managing travel expenses and improving employee satisfaction. 

Here are some key benefits: 

1. Cost Savings: One of the primary advantages of these negotiated hotel rates is the significant cost savings. With these discounted fares, companies can manage and control accommodation costs, significantly saving your travel budget.
2. Enhanced Benefits: Employee groups can enjoy additional perks like free Wi-Fi, complimentary breakfast, parking, and access to fitness centers or meeting rooms. Some negotiated agreements include room upgrades or flexible check-in/check-out times.
3. Increased Employee Satisfaction: Employees are likelier to stay in comfortable and well-located hotels, improving their overall travel experience. Moroever, employees can earn loyalty points or rewards from the hotel chains, adding personal benefits.
4. Convenience: Negotiated hotel rates often come with streamlined processes, making them convenient for business travelers. For instance, centralizing billing, a direct booking platform, and dedicated customer service can make their business trip seamless. 

How Can itilite Help You Secure the Best Corporate Hotel Rates?

Although you may be able to get the best corporate hotel rates, however the procedure can take a toll on your travel manager. Searching relevant hotels, setting up meetings, and negotiating the right deal can be exhausting. 

itilite partners with some of the most popular business hotels to offer competitive hotel rates. What’s more, we partner with travel managers to analyze their hotel policies, spend patterns, and existing hotel preferences. We work collaboratively to negotiate the best corporate deals on their behalf and help them build a world-class business travel program. To get the benefit of our specialized services, talk to our solutions experts now.

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