With the prevalence of online booking travel agents (OBTA), it can often appear you will get a better room rate if you book accommodation yourself, rather than through your travel manager. You may also believe that by booking direct with a hotel or through an OBTA, you will avoid paying any additional fees and therefore save money on corporate hotel bookings. The truth is, in most cases these are false economies. What seems like a short-term win can turn into a huge amount of missed savings in the long run.
If you examine the true cost of travel you may end up paying more than if you had booked through your travel manager. In addition, you are also missing out on a range of benefits which come with consolidating all your hotel bookings through a Travel Management Company like FCM.
#1 Leverage and relationships – money talks
In 2014, our corporate consultants in the UK alone booked a total of 688,000 room nights worth £85.9m. When you add the volume our parent company, Flight Centre’s leisure brands both in the UK and globally, it means we have a powerful foundation for negotiation. While your FCM Travel Manager has their own experience and knowledge of hotels, they also have the support of our specialist hotel contracting team. This team has built strong relationships with leading hotel chains from budget to luxury and is dedicated to negotiating the best rates with excellent soft benefit inclusions for our corporate clients
#2 Reality check – true cost of travel
Rates may look better on paper, but what extras are you paying for through expenses? Consider this scenario:
- FCM quote you a room rate of £120 per night in your destination.
- You search on the internet and find a rate of £110 for hotel of the same standard and choose to book this one direct.
- Your traveller pays an additional £15 for wi-fi, £15 for breakfast and takes a £9 taxi to their meeting - total cost £149.
- The FCM rate included wifi and breakfast and was in walking distance of the meeting.
FCM knows your travellers and your requirements and negotiates the added extras you require into your total rate. In addition, through most OBTAs, you do not get a VAT invoice, which means you can’t claim VAT adding an additional cost to you. FCM is 100% TOMS compliant.
One in three corporate hotel bookings are amended or cancelled. Often the cheaper rates available through OBTAs are non changeable and non refundable. You might think you’ve saved £15 by booking direct on a non-flex rate, but if things change and you can’t alter your booking, you lose the whole amount. All of our preferred rates include a flexibility clause so you can cancel between 2pm and 6pm on day of arrival.
#4 Turn up the volume
Booking all your hotels through FCM gives us the ability to negotiate rates based on your total volume of room nights. Any bookings made direct or via OBTAs aren’t attributed to you and won’t count towards any future rate negotiations. The benchmark for us to start negotiations on your behalf is approx 50 room nights per annum in a particular location. Even if you don’t have a significant volume in any
one city and your destination spread is quite diverse over a number of cities / countries, we can also look at negotiating a chain discount on
your behalf. Ultimately, getting the best rate is reliant on receiving all of your hotel spend.
One of our corporate clients, a national food retailer, was booking accommodation across 15 hotels in the Heathrow area. By consolidating this to 5 hotels we were able to negotiate volume rates and saved the client 11.9% or £25,000 over 12 months.
#5 Recognition of a corporate booking
If you book direct or through an OBTA, it will be perceived by the hotel as a ‘leisure traveller’, rather than a corporate booking. This can result in:
- A higher chance of the reservation being ‘bumped’ if the hotel is overbooked
- Allocation of worst rooms, eg. above the kitchen or near the lift shaft
- Allocation of a single bed room whereas recognised corporate bookings
- will often get ‘double for single occupancy’
- Hotel rewards points not automatically allocated
Bookings made by FCM are always recognised as ‘corporate’ and treated as such by the hotel.
#6 Security and traveller tracking
FCM provides industry leading traveller tracking capabilities to help you instantly locate impacted travellers.
In the event of an emergency, you need to be able to track the location of your travellers quickly and efficiently. This visibility is only possible when all your travel is booked through FCM.
On a more personal level, you also have a duty of care to your employees to ensure they are safe when travelling. When FCM develops a relationship with a hotel, as well as ascertaining the safety of the area where the property is located, the audit we use includes 68 questions on safety and security.
These questions cover everything from small scale items like smoke alarms, whether parking areas are well lit with security surveillance to the level of onsite security, are staff trained in first aid and CPR. Some of our clients have a lone female traveller policy and it is important to know which hotels are more suitable than others.
#7 Payment and expense management
When you book your hotels through FCM, the charges can be billed back to your FCM account. All your travel costs are then centrally accounted and invoiced. Typically, when booking a hotel through an online booking agency, a voucher is issued to cover the room charge only.
Additional expenses such as room service, wifi or laundry will have to be billed and paid separately, often to the traveller’s credit card who will then claim expenses. You essentially end up making two transactions with two separate vendors. This results in travel costs being harder to track and reconcile.