The way business travelers book hotels is undergoing a radical transformation. Gone are the days of predictable corporate rates. Enter dynamic pricing, a system where hotel room rates fluctuate based on real-time factors like demand, booking time, and even the weather.
From Static to Surge: How Dynamic Pricing Works
Imagine a corporate rate of R1200 per night, a familiar concept for many business travelers. Dynamic pricing throws a curveball. That same room could skyrocket to R3000 or more during peak periods. Hotels can now adjust prices constantly, maximizing revenue when occupancy is high.
The Upside for Hotels: Making Up for Lost Time
Hotels are finally catching on to the dynamic pricing trend, previously leaving money on the table with static rates. Carmen Hidalgo, a Customer Success Manager at Corporate Traveller, explains, “Why not charge premium rates when occupancy is high?” This strategy aligns hotels with the rest of the travel industry’s dynamic pricing practices.
The Downside for Business Travelers: Planning is Key
This pricing volatility creates a challenge for corporate travel. Hidalgo advises travelers to book well in advance to avoid last-minute surges that could blow travel budgets.
Travel Management Companies: Anchors in the Pricing Storm
Negotiating corporate travel agreements becomes crucial in this dynamic landscape. Travel management companies (TMCs) can act as a safeguard. With expertise in market trends, TMCs can secure deals with hotels that include:
- Amenity packages: Free breakfast, parking, and other perks can offset higher room rates.
- Favorable rate ceilings: Capping dynamic pricing during peak periods provides some predictability.
- Price comparisons: TMCs ensure clients get the best rate by comparing pre-negotiated deals with dynamic pricing options.
The Power of Bulk Buying and Global Networks
TMCs leverage their buying power to negotiate better deals for corporate clients. This includes:
- Corporate discounts: Exceeding typical discounts offered to individual businesses.
- Loyalty program enrollment: Unlocking benefits like priority service and upgrades at an enterprise level.
- Airline benefits: Securing perks like complimentary upgrades and baggage allowances.
The Advantage of Expertise, Especially for Small Businesses
A staggering 90% of new small and medium-sized enterprises (SMEs) working with TMCs like Corporate Traveller lack existing corporate agreements. Hidalgo explains, “Our volume allows us to negotiate directly at levels they’d never qualify for individually.”
The Takeaway: A World of Possibilities in a Dynamic Landscape
Dynamic pricing may disrupt traditional booking methods, but it doesn’t have to be a nightmare for business travelers. Partnering with a travel management company with global reach and negotiation expertise can help businesses navigate this new landscape and secure the best possible rates and perks for their employees.