Travel Blog

Read all about our journeys, experiences and observations from the team at Gilpin Travel.

2 Jul

Tipping the BAR

Tanya DustinPaying more attention to ancillary products and services and being innovative can add meaning and value to request for proposals (RFPs) between travel management companies (TMCs) and hotels.

Tanya Dustin, sales manager for Gilpin Travel, says hotels need to be more ‘savvy’ about ancillary services such as parking, meals and internet, which can be up to 25% of the total expenditure at the given property. ‘Wouldn’t it be best for hotels to try and keep as much of that revenue as possible in house?’

She says this is the way the world is going, as evidenced by Air New Zealand’s new approach to trans-Tasman fares and trends in the US airline scene. ‘Ancillary services can be money in the bank, they make up to 10% of an airfare.’

Dustin says she also encourages incentivising the use of corporate rates. ‘Perhaps free nights or kick backs can be offered after a certain level of business is achieved. If that sort of thing is built in to a programme it gives measurable targets for both the hotels, companies and TMC’s.

Travel management companies are looking ahead to a year with a difference (in the form of Rugby World Cup) in 2011. ’We’re very busy with Rugby World Cup and domestic RFPs and getting a fix on the black out dates and inventory available. What TMCs will be doing right now, particularly on behalf of their volume clients, is trying to secure rates that will be held during RWC dates.

‘Some hotels are definitely holding a small number of rooms back for corporate. The hotels will want to control their revenue – and who wouldn’t? But it is possible, as we get close to the event that there will be some dumping of room inventory during the weeks. We are finding that the quarter finals, semis and finals are generally over the weekends and this is where accommodation is harder to come by.’

Dustin acknowledges a growing trend over the last couple of years is for TMCs to book at the best available rate (BAR) rather than the previously negotiated rate.

‘It is always good to have a negotiated rate as companies need to budget and they have to know the maximum they should be paying. On the other hand, TMCs should be booking the BAR rate for these companies if they are lower than the corporate rate – if companies can come under their travel budget that’s brilliant.’

Dustin (who has had a stint on ‘the other side’) says BAR rates can provide challenges for hotels in terms of reporting by client. ‘I have received reports from hotels in the past that totally under state the number of room nights that a client has stayed. Most BAR rates are not linked to a company and therefore no tracking of a company’s actual room nights occurs. A really good reason to use a TMC and ensure you are maximising your volumes in corporate rate negotiations.’