Workforce travel is substantially different from business travel, and small businesses often overlook the opportunity to save on hotel costs for such travelers – to the detriment of their bottom line.
Unlike business travelers, workforce travelers aren’t professional or managerial employees who have company credit cards and stay in mid-scale to upper scale hotels. Rather, workforce travelers are your construction crews, field technicians, drivers, merchandisers, installers, inspectors and emergency response crews. They’re often on the road with limited technology, may not have access to a corporate credit card and may not book with an agency. They tend to stay in economy to mid-scale hotels.
According to the American Hotel and Lodging Association 2009 Lodging Industry profile, of the 950 million room nights sold, 60% of hotel room nights were occupied by leisure travelers, traditional business travelers accounted for another 20%, and non-professional, non- managerial business travelers made up the remaining 19%. That 19% is a huge opportunity for savings – or loss.
What is a workforce traveler? Let’s start with what a workforce traveler isn’t: a professional and managerial employee that books online or through an agency, carries a company credit card for business expenses and submits travel expense reports. Business travelers tend to fly more than drive and stay in upper mid-scale to upper scale hotels. In contrast, workforce travelers are the windshield warriors of the world. They wear “boots, not suits,” are often on the road with limited technology, may not have access to a corporate credit card and may not book with an agency. They tend to stay in economy to mid-scale hotels. These employees are your construction crews, field technicians, drivers, merchandisers, installers, inspectors and emergency response crews.
How to Negotiate with Hotels
If you know how to negotiate through the system to get the best rates on hotel rooms, you can avoid the published price and receive the private, negotiated rate.
While some companies prefer to manage the booking process themselves, others look for the expertise and buying power that a lodging management company can offer. This translates into time and financial savings– if you know what to look for in such a company.
- An Industry leader. How long has the lodging management company been in business? Does it have an established hotel network?
- Program flexibility. Look for a program that offers diverse products that can serve small and medium size businesses. Do you have crews or teams that stay weeks or months at a time? Do you have management employees that stay only a few nights? Make sure you select a program that can accommodate both. .
- Volume of more than 10 million room nights annually. The best negotiating power comes from delivering the most volume. Look for a lodging management company that purchases more than 10 million room nights per year. That’s $500,000,000 worth of negotiating power in your corner
- Traveler flexibility. Make sure your traveler has more than one option to check-in. Sign in sheets may work best for a transient work force while independent travelers may need a card. Can your traveler walk in or reserve ahead of time? Without flexibility, compliance and savings suffer.
- Comprehensive hotel network. With over 40,000 economy and midscale hotels in North America, you should select a provider that has at least 10,000 under contract. This creates convenience for the traveler and ensures auditable electronic billing at thousands of hotels. Can your program provider offer a list of hotels in their network?
- “Turnkey” lodging programs. “One size fits all” can indicate a lack of financial, network and operational resources to manage products that truly meet your company’s lodging needs.
- Lack of transparency. Does it seem like a program’s low fee is too good to be true? It probably is. Some programs make up the difference with a hidden hotel commission. If the program makes money based on a percentage of the hotel rate, their incentives are mismatched with yours.
- Centralized reservations. Do you have to call one number to use the program for every reservation? What about last-minute walk-ins? What if plans change later that night? Can they handle the call volume? What kind of wait times should you expect?
- New programs. Do you want to risk your business with a program still trying to establish its reputation with hotels and customers?
NFIB can help you save 20-40% at more than 10,000 hotels with the NFIB Hotel Savings Card.