February 14, 2008 - Much to the detriment of corporate buyers, overwhelming problems still prevent prompt and accurate loading of negotiated hotel rates into global distribution systems. The grueling and time-consuming process, which occurs each year after the fall hotel negotiating season, does not seem to be improving fast enough to satisfy hotel companies' clients concerned about the impact on their managed travel programs. Despite some technological advancement, rate loading auditors and buyers agreed that little changed for 2008, though some held out hope for a smoother 2009 process.
"There is still a chronic delay in loading hotel rates," said Gilead Sciences Inc. corporate travel manager Rick Wakida, who had just begun to see some of his company's negotiated rates in the GDS when he spoke last week with
Management.travel. "I don't get the feeling that the process has improved. It doesn't matter if it is on the part of a chain or an independent hotel."
Unfortunately, there has not been widespread use of automated programs by hoteliers to speed up the process, and Wakida noted that technological barriers are the major bone of contention between buyers and suppliers.
"Customers are not willing to pay for the hoteliers' technology," Wakida said. "The supplier usually has little or no resources to update technology, and so we are paying for automated rate loading auditing services. That's a lot of money as far as paying to use technology to improve the process."
"I think everyone would love to see automation," said Neysa Silver, director of hotel solutions for the CWT Solutions Group, addressing the snail-paced process of seasonal hotel workers manually inputting negotiated rates into GDSs. "Everyone is still looking for improvements, and customers spend a lot of money to make sure that proper hotel procurement is in place."
After CWT Solutions Group's first audit of the GDSs this year, Silver said that about 62 percent of client rates were properly loaded, compared with 57 percent last year. She and her team still need to perform four more audits to ensure every rate is loaded.
While the results of CWT's first 2008 audit aren't overly encouraging, there may be cause for cautious optimism that discernible process improvements are on the way for 2009.
"It is getting better every year," said R.D. Brown Co. consultant Ralph Brown. "The communication seems to be working better, and the job [the hotels] are doing seems to be moving faster." Brown added that the new rates his firm helped input should have been loaded by the end of January or early February.
Meanwhile, BCD Travel's consulting arm, Advito, has implemented a standardized rate loading process that all clients eventually will use. It is designed to put an end to the miscommunication between buyers and suppliers that often happens when hoteliers misinterpret rate loading instructions.
"We're trying to make the process much easier for the customers. When the rates are loaded incorrectly, it can be a run-around process that can go on throughout the year," said Julie Jones, director of hotel distribution for BCD Travel. "We're implementing the standardized rate loading process to simplify the process, and I think it will make a tremendous difference."
According to vice president of worldwide sales strategy for Intercontinental Hotels Group Jill Cady, a major contributor to the delay in hotel rate loading is the lengthy negotiation period, which occurs throughout the fall months but can extend beyond that.
Annual negotiated rates typically expire Dec. 31 and if the renegotiated rate is not in the GDSs by Jan. 1, the buyer and travel management company are forced to use the best available rate--which is usually significantly higher than the negotiated rate--or call each hotel and ask for the rates to be loaded.
Cady suggested that individual buyers work out a more efficient approach in order to complete negotiations earlier in the year.
The lack of a universal coding system to differentiate between rates also causes grief, according to a report issued by the National Business Travel Association. Hotels use the wrong codes to input negotiated rates into the GDSs, and those codes are not recognized by the travel management companies booking reservations on behalf of corporate clients, according to NBTA. For example, Sabre Travel Network uses the letter 'N' to indicate negotiated rates in its coding system, but if 'N' is absent, the rate may not be applied and the hotel companies are back to square one, inputting data all over again.
All that data can overwhelm seasonal "key punchers," Wakida said, leading to typos and common mistakes.
As such, many companies have hired rate loading auditors to ensure that their negotiated rates are available in a timely fashion. The loading process may be a little less arduous for smaller corporations, experts said, suggesting that those clients by March benefit from their rate negotiations more often than their large-corporation counterparts. Still, according to travel management rate auditors, the process can take up to four months to complete--leaving the buyer at a disadvantage.
