Rate & Allocation Negotiation
An overview of BSI’s negotiation process is given below:
- Analyse customer data sources to determine the complete demand profile
- Understand the ‘performance’ of the hotel in terms of traveller satisfaction as such information can deliver important negotiation influence
- Undertake a full future supply and demand impact analysis. For example, will demand remain constant over time? What new hotels have been added to the supply chain or upgraded to meet supply standards?
- Have a clear understanding of the average rate achieved at each hotel, the level of declined business and, with the use of external benchmark indices, understand RevPAR performance of star-rating / location;
- Capture the full range of rates – i.e., Room Only, B&B, Dinner Bed & Breakfast, Last Room Availability (LRA) and non-LRA, volume commitments, commissionable vs. net rates – to establish the negotiation stance
- Benchmark proposed rates fully against market drivers as well as similar volume and stay profiles achieved by other customers
- Negotiation of inclusive value-added extras, long stay and group rate contractual terms
Ensuring Last Room Availability Contracts
The first level of control used to ensure rate and capacity throughout the year to meet demand is to address Last Room Availability (LRA) contracts, which ensures that if the room type is still selling the customer’s negotiated rate should be applied.
Our system is unique in this area in that the contractual terms are copied and retained so that we remain in control of the contractual terms and thus can identify any breach and address at time of booking.
Delivering Proactive Allocation Models
We place great emphasis on the allocation model. We proactively look at future trending to establish and ensure allocation meets a corporates capacity needs, i.e., long-term allocation as part of the contractual rate agreement.
General lead in time for bookings are evaluated per city, so that the allocation is set with the appropriate lead time – for instance there is no benefit of a release time of 72 hours for an allocation if, typically, bookings are made 48 hours out from arrival.
Peak demand locations and periods are specifically addressed through advance planning and supplier engagement. This maybe a conference, exhibition or sporting event globally that we know through market intelligence will have an availability impact.
The allocation model protects customers from availability issues, whilst also protecting agreed rates from any inflationary pressure.