Under pressure to keep your travel expenses in check? What a question… of course you are! Having the right information available to give you the upper hand when it comes to negotiating with your suppliers is vital. We discussed this at last week’s BTiQ webinar about hotel pricing (you can listen to it here).
A key point is to have the right data to hand. That’s knowing what you’re spending, but also knowing where the market is at. During the webinar, STR shared interesting facts about hotel performance in 2016 and even gave a glimpse into the future. And if you’d like to read up on the topic, have a look at this report – giving insights for the first time into Airbnb’s performance in comparison to hotels in key cities.
So what about knowing what you’re spending? What can you do ‘in-house’ to prepare for negotiations? Here are some tips:
1. Hotel programmes are only as good as the data that informs them
Remember that data has multiple uses and all help you make your programme better! The obvious one is using data for negotiations, and, internally, for compliance. Perhaps less well practiced is using data to understand where your travelers are going and, on the flip side, how you are driving market share to your preferred suppliers.
2. Showing proof of your driving power
Have you done any communication campaigns in the past? Or advertised preferred properties together with your hotel partner? Analyse the results of these initiatives and use them in negotiations (and for maintenance of your programme): best case you can show how you drive market share successfully to your preferred partners; worst case you can show the reasons why your travellers don’t stay at preferred options.
3. Be transparent
In any industry, relationships are key. And relationships based on honesty and trust are key for successful negotiations. Be open and honest about your hotel programme and the likely performance for a specific property or chain. This will help you to establish an achievable programme and by being realistic with your promises, you may actually end up over-achieving to drive even better relations. Also be open to trying new things, for example, a hybrid of negotiated rates and dynamic pricing, especially for programmes that are project based and ‘jump’ locations.
Armed with the data and analysis of your hotel spend, information about current market trends and the proof that you have the power to influence, your position at the negotiation table is a strong one. Just remember: don’t overpromise and underachieve. It’s much wiser (for the short and long term) to ‘underpromise’ and overachieve!