Analyze Your Hotel Spend, Patterns & Footprint
Start with your data. Before you can build a hotel program, you need to understand where your travelers are going, how often, and what they are currently paying. A data-centric program uses internal booking records—not just market-level assumptions—to drive decision making.
Pull reports on:
• Top travel destinations by volume (city and property level)
• Current negotiated rates versus actual paid rates and Average Daily Rate (ADR) trends
• Leakage—spend outside of preferred properties and channels
• Compliance rates and traveler behavior: booking lead time, average length of stay, cancellation patterns
Define Your Product Type Strategy
Beyond geography, buyers should deliberately set the mix of property types they want in their program. For example, a program might target roughly 80% mid-scale/4-star properties, 15% value, and 5% executive. Being intentional about product mix—and reviewing whether the current program reflects actual traveler behavior—prevents drift and keeps the program relevant.
Set Room Night Thresholds & City Caps
Determine a minimum room night threshold below which individual property negotiation is not justified—for example, 250 room nights per year in a given market before contracting directly rather than relying on chain-wide rates. Set city caps (maximum preferred properties per market) as guidance, updating them regularly based on actual ADR data and traveler patterns. If 25% or more of room nights in a city are exceeding your cap, or ADR is at or above it, it may be time to revisit whether the cap reflects market reality.
Benchmark with Market Intelligence
Buyers who work with a consultancy partner or TMC for market intelligence will enter negotiations better prepared. Knowing whether a given city is expected to see significant rate increases—before you solicit—helps you set realistic targets and avoid being caught off guard.
Define Your Negotiation Strategy
The pre-RFP phase is the right time to determine your negotiation parameters in advance, not mid-process. Think through:
- What constitutes an auto-decline? For example, any bid returning more than 20% above your city cap.
- What are your auto-accept parameters? What metrics must a bid meet for immediate acceptance?
- Will you accept dynamic rates (a discount off Best Available Rate), fixed rates, or both? Where in the world will each structure apply?
- What value-adds matter most to your travelers? Breakfast, parking, last-room availability? Define your priorities before entering negotiations.
The more rigorously you define your strategy upfront, the more you can stop being reactive and start being strategic when bids arrive.