Booking a hotel room isn't as straightforward as booking an airline seat. There are more options, for one thing, and choosing a room is arguably more emotive than a seat. You might be spending days in a hotel room compared with hours in a plane seat, and location also plays an important role. No matter how much you may like that room or that hotel, the love affair will soon pall if there's a wearying journey to your business meeting.
Not surprisingly then, there is no single best way of booking hotel rooms. Every method has its pros and cons, and finding the one best for you may well be a case of trial and error.
Size matters
Large firms will often have a dedicated travel department and will be booking lots of rooms at specific hotels in the most convenient locations. Such corporations will quite happily use one of the large Travel Management Companies (TMCs) like Carlson Wagonlit, Hogg Robinson Group and so on for ease of administration.
"Larger firms will have their own travel manager and the booking process is more controlled than with a smaller organisation," says Jennifer Charlton, director of business development at Carlson Wagonlit.
TMCs have always been involved in booking hotels, but it's an area into which they've expanded in recent years. With their airline commissions under pressure they've discovered hotel bookings as a new revenue stream. Earnings are high because hotel rates have increased at the same time as air fares have fallen. A week's stay in London can cost more than a transatlantic business class ticket and may possibly prove more lucrative to the booking agent.
Charlton says: "Carlson Wagonlit's hotel bookings have increased by 39 per cent so far this year because of the advantages a TMC can offer. When firms book the ticket and the hotel with us we can offer security tracking [firms will know the exact whereabouts of their staff], logging of passenger profiles [hotel guests' individual likes and dislikes] and our booking model isn't subsidised by commission payments."
Because of the volume of business, TMCs have leverage with the hotels and groups. It may not just be a special price the TMCs can negotiate; they might also be able to get hoteliers to throw in extras like breakfast, free car parking, late check-out and so on as part of their rate package.
TMCs do charge booking fees but, says Charlton, "this will depend on how the account has been set up. Some firms prefer us to charge net rates while others would like a commission rebate. We can also provide a 'bill back' provision for those firms who like their hotel expenses billed monthly."
One drawback with using a TMC is that, when booking away from the regular hotels, agency staff may be on unfamiliar ground. Invariably they'll have to fall back on airline GDS (Global Distribution Systems) to make the booking. But GDSs have an antiquated Eighties-style display like Microsoft "DOS" which is light years away from the hotel displays posted on the web.
This means that booking staff have no visuals at their disposal and the description of the property is likely to be have been provided by the hotel itself rather than by an independent source. Charlton doesn't view this as a problem for larger firms, who would have their own travel managers or departments who would select the hotels themselves, but it could be a problem for smaller players.
But even though TMCs are booking more rooms than ever before, they've hardly cornered the market. An awful lot of companies out there prefer to do it themselves [outside the TMC programme] or use another booking source. Carlson Wagonlit admits that 25 per cent of hotel bookings made by North American firms fall into this category, rising to 48 per cent in the case of their European counterparts.
A major alternative to the TMCs is being provided by specialist booking agents such as HRS. This long-established German-based firm has recently arrived in the UK and has already snared corporate business with banks, retail chains and so on. Its strength is, naturally, good coverage of Germany but the HRS system also allows clients to make "real-time" bookings. This means that the hotel room is booked direct and customers have the flexibility, in almost all cases, to book and cancel without penalty. Unlike TMCs there are no booking fees.
Commercial director Grant Appleton says: "Our system links directly to the hotel's database so we only list properties which are available on any given date. We are a client-led system. Our earnings come from hotel commissions. If a client has negotiated its own rates we can build these into the system. Companies can build their own portal on our site and incorporate those hotels mandated by their travel policies.
"We don't have the merchant model which requires guests to pay in advance. Our bookings are flexible because we find that 30 per cent of hotel guests change the length of their stay within 24 hours of arrival."
According to Appleton, hotels aren't happy when their bookings come through agency GDSs. "That's because they must pay GDS fees, and this is a massive cost to a small hotel," he explains. "In addition, if the booking has come through a TMC that property will also have to pay an override [or extra] commission [to the TMC]." For example, the GDS fee alone for a budget hotel can account for 10 per cent of the room rate.
HRS admits it can't offer much, if any, saving on chain hotel rates (because they have a price guarantee) but by not using GDSs as a booking tool the firm can offer a greater choice of properties. Appleton adds: "Our website provides rich content, which gives the customer an informed choice. We display a huge choice of hotels in all categories. The non-chain hotels are invariably less expensive."
In the case of Berlin (a sprawling city, making hotel location important), HRS's website displays dozens of hotels of all classes, from five to one-star. These range in scope from the £199 (room only) five-star Adlon close to the Brandenburg Gate down to the £17 (including breakfast) one-star Bongard in the suburbs at Reinickendorf. It's an incredibly comprehensive display which allows customers to book by price and location. With the latter you can choose not just by area but by motorway access, proximity to the U-Bahn (Berlin's equivalent of the London tube) and convenience for sights and attractions.
Another option, which might appeal to the smaller firm or individual, is the model provided by hotels.com, a booking firm linked with Expedia. The website provides many photos of the hotel and a lot of description, which hotels.com says is compiled by independent writers. But both these firms still follow the older merchant model whereby customers pay up-front and have to pay fees for changes or cancellations.
Patrick Oqvist, marketing director of hotels.com, says: "We find that some people prefer to pay ahead from the budgeting point of view. A small firm would then think that part of the trip is done and dusted."
"We can't offer much of a price advantage over the big chains [because of their price parity] but business travellers are short of time and we offer the chance for customers to compare the different chains in one destination. As a traveller you wouldn't necessarily know which chains are in the same city. We also offer the chance to book non-chain hotels. In Europe, 70 per cent of hotels are independent and are without online booking tools."
Other booking firms following this model include Travelocity, lastminute.com and Ebookers. But despite involving up-front payment, they're popular with business people. Recent research by BDRC showed Expedia leading with an 8.3 per cent share of the UK market, with lastminute.com following with 5 per cent. Hotels.com came third with 2.9 per cent.
A further option is offered by Priceline. Here you request a specific area and hotel grade and are allocated a hotel which may be discounted. Priceline could be a solution for anyone going on a recce trip for whom location isn't vital.
Booking direct
How about booking direct? Small firms and individual travellers might find it better to go down this route. Most chain hotels' websites have a price guarantee, and gone are the days when only rack rates were quoted. The latter have gone the way of the dodo now that hotels have adopted market pricing. Nowadays the only time you'll be quoted a rack rate is at times of exceptional demand such as when a trade fair is taking place.
Travellers booking chain hotels are wise to join a loyalty programme. When you reach one of the higher tiers it opens the doors to preferential accommodation and other perks in that chain's properties across the globe. An upgrade to the executive floor can save you a small fortune on the cost of buying breakfast, snacks and drinks, and hotels' loyalty points are usually far easier to redeem than their airline equivalent.
Canny travellers meeting clients in Asia or the Middle East know to book at the "local rate". Travel management consultant Andrew Solum says: "In these areas of the world, local firms place lots of business with hotels. It's not just rooms they book but maybe also meals, banqueting and so on. It means they can obtain the keenest rates. So if you're meeting with someone in these areas ask them where you should stay."
Finally, if your travels take you to a select number of hotels then make contact with the management to ensure that you get better treatment on your stays. This is becoming easier as chain hotels want to get to know their guests better. Some host weekly get-togethers for their loyalty card members; at others you might find management more in evidence.
Andrew Solum recalls a recent stay at a chain hotel at Tysons Corner outside Washington DC. While he was having breakfast one morning he spotted the director of sales wandering around the dining room handing out her business cards and asking guests if everything was alright. "It was a nice touch," Solum says, "here was an opportunity to mention a little niggle – something so minor that you'd feel reluctant to tell the front desk."
But remember that hotels will be more inclined to help when you're honing your PR skills on their behalf.
