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What Is The Best Way to Manage Hotel Supplier Negotiations?

While understanding the marketplace is important, it is also critical to understand the best way to go about hotel supplier negotiations.  In some cases, a company may have dozens or hundreds of preferred hotel deals across the globe.  KesselRun utilizes the best available RFP technology which, while readily available, carries a cost to implement and know-how. 

In addition to utilizing hotel RFP technology in support of bids, these platforms provide both the client and hotel a level playing field and the ability to evaluate other key areas of consideration such as a hotel’s practices and policies around its sustainability initiatives and capabilities to negotiate beyond just basic room rates including amenities such as breakfast, parking, WiFi, and more that can all be part of the negotiating process.

Best In Class Technology

Corporate best practices for sourcing, negotiating, and loading preferred hotel rates depend on both accurate and timely data.  While the annual hotel RFP marks the one time event that sets the tone for the entire year in terms of settling on a preferred hotel program, the ability to automatically populate a RFP bid list and enable real time continuous sourcing based on changes to a client’s business pays dividends.  At KesselRun, we have found that populating a bid list based on a clients’ room night volume automatically can save as much as 50% in labor costs for this particular task.  In addition, the ability to negotiate new properties as soon as pre-defined volume thresholds are met can add direct cost savings of up to 20%.

KesselRun has partnered with CapTrav and ReadyBid to enable best in class technology to optimize our client’s hotel programs.

The Real Reason Corporate Travel Has Changed

Dynamic Discounts Are a New Trend

In addition to negotiating traditional discounts, many properties are negotiating “dynamic” discounts which provide a percent off the “rack rate” at the time of booking.  This method may or may not be in the client’s best interest so an evaluation should be part of this strategy.  

KesselRun is seeing and supporting a trend in well managed hotel programs around “continuous sourcing.”  Here, the strategy is to conduct a baseline yearly negotiation but continuously monitor room night volumes across the entire hotel program and modify as needed throughout the year in an effort to optimize program spend.  Ultimately, the goal is to maximize savings across the right number and type of hotels without diluting the client’s discounted program with too many properties or the wrong type of discount

corporate travel supplier negotiation

Travel Policy Plays an Important Role

As part of a company’s evaluation it should consider its current travel policy.  KesselRun has found that many business travel policies today allow for the booking of Airbnb and VRBO in lieu of traditional hotel stays.  We have found that as much as 20% of lodging can be attributed  to shared economy type of bookings.  This analysis should be part of the overall lodging strategy for any organization and should be evaluated both in terms of cost and traveler satisfaction.  

business travel policy
OUR DIFFERENCE

Why KesselRun

KesselRun brings deep experience to every aspect of your corporate travel program. After 20 years in business, we still believe that every consulting engagement is as unique as our client’s business.

20+ Years in Business
Custom Solutions
Industry Experts
Excellent Client References
MEET OUR

Executive Team

Our Executive Team has decades of experience across the entire corporate travel supply chain. We come from both Big 5 management consulting firms and from corporate travel supplier and client sides of the business. We provide flexible, thoughtful, and independent solutions. Our goal is always to increase traveler satisfaction while optimizing corporate spend and supplier leverage.

Brandon Strauss

Brandon Strauss

Partner/Co-Founder

Michael Brennan

Michael Brennan

Partner/Co-Founder

Krissy Herman | KesselRun

Krissy Herman

Vice President of Program Management

erik woodfolk

Erik Woodfolk

Director of Federal Programs and Services

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