Booking a hotel for business travel causes a dilemma for many people. On the one hand, we wish to stay in the best possible accommodation, yet on the other, we also want to be fair with our company or client, being responsible in terms of money. Although these goals seem contradictory, both can be achieved when you are ingenious enough to overcome the limited budget.
It’s important to keep in mind that hotels and most companies that provide accommodation options like online travel agencies, offer so-called “backdoor” discounts.
These discounts are being introduced by these companies only for price-conscious travelers. Consumers who don’t bother too much about prices (like business travelers) are not being offered any reductions. This maintains the allure of exclusivity for vacation travelers because they are sensitive to prices.
Companies create “hurdles” for customers so as to not make it too easy for them and to minimize cannibalization. Customers who jump over these hurdles can identify themselves as price-conscious and think that they deserve discounts.
In the hospitality industry, two popular hurdles are: selling packages and using uncertainty.
PACKAGE PRICING
The first strategy is package pricing. In the hotel industry, it is well known that business travelers often pay higher prices compared to leisure vacationers.
To entice vacationers with irresistible deals, many hotels offer substantial discounts of 25% to 50% if their property is booked as part of a vacation package, which typically includes airfare and/or car rentals. Such packages are offered at online travel agencies like Expedia and Orbitz, as well as by airlines.
The beauty of this strategy lies in the fact that business travelers don’t tend to purchase packages, even when they are highly discounted. And this is because reservations are non-refundable.
Travel agents use minimal promotion to business travelers, they are not pushing packages because they don’t earn lucrative commissions on them. Therefore, packages are marketed mainly to price-sensitive leisure seekers. This leaves the premium hotel experience intact because hotels avoid damaging their brands by offering apparent discounts on nightly rates.
A wide range of establishments, including some of the most exclusive ones, such as the Ritz Carlton in New York, take part in this game of discounts through packages. As such, online travel agencies can boast a tempting discount of 30% off, or more, on a seven-night air/hotel package at some of the most prestigious locations.
This makes it so much cheaper than booking separately. As a result, these hurdles weed out business travelers.
UNCERTAINTY DISCOUNTING
Another common tactic is creating uncertainty in exchange for a discount. It is often used to identify price-conscious customers in the hotel industry.
Travelers who are willing to purchase without knowing exactly which hotel they’ll be staying at, which is the hurdle, are rewarded with some nice discounts by intermediaries like Hotwire and Priceline.
Both Priceline and Hotwire offer an option that is not too restrictive but also promises huge deals, even up to 60% off. This option doesn’t require you to guess when making bids. You’ll see listed: a hotel’s general location, quality level (1 to 5 stars), facilities (gym, business center), nightly rate, and attributes like TripAdvisor rating.
The crucial missing piece of information is the exact name of the hotel, which is only revealed after the customer makes a non-refundable credit card purchase.
The advantage for hotels participating in these services is the ability to offer discreet discounts. Hotels facing capacity challenges can avoid tarnishing their brands by publicly advertising rock-bottom discounts. Instead, a hotel’s name is disclosed privately after a customer has paid in full.
Equally important, the uncertainty tactic reduces cannibalization due to the exact hotel revealed and, potentially, the price to bid. I bet you’ll agree that most people prefer to know which hotel they are booking in advance, particularly if they’re making a non-refundable commitment.
However, price-conscious travelers are more likely to stay at any hotel that meets their basic requirements like the star rating, in exchange for a discount.
But fear not! If you’re keen on gaining insights, there are opportunities on the web that make using Priceline and Hotwire more appealing. Sites like BetterBidding and RevealHotels provide useful information that can help reduce uncertainty. You’ll be able to check the details, including winning prices and hotel names, helping bidders deduce with a quite high degree of accuracy which hotel they’ll get and how much they should bid.
♦ TIP ♦
Did you notice some unexpected charges that appeared only at the end of the booking process or after your arrival? To avoid these hidden fees, make sure you always read the fine print. Also, understand the total cost before you book the hotel. If you’re unsure about anything, just contact the agency or hotel directly.
Best Travel Cost Reduction Strategies To Help Business Travelers Find Affordable Luxury Hotels
If you want to stay in luxury hotels on a budget, you will need to do some planning and research in advance. But with a bit of preparation, while referring to these tips below, business travelers can find high-quality hotels while still adhering to their strict budget constraints.
Comparison Shopping And Price-Tracking Tools
To save time and money as well as find the best deals on luxury hotels, business travelers can compare prices of different hotels on various booking websites. For instance, Expedia, Kayak, and Booking.com can help you compare prices from multiple hotels and travel websites at once. There’s also an option to set price alerts if you want to be notified when rates drop for a specific hotel or destination.
In addition, you can use price-tracking tools, such as Price2Spy (with a small monthly fee), HotelSlash, or free browser extensions like Ratepunk. These will monitor and automatically compare hotel rates, and/or alert you when the rates drop.
Booking During Off-Season Or On Weekdays
Luxury hotels offer great deals during the off-season or on weekdays when they are unlikely to be fully booked. Therefore, be flexible with your travel dates, if possible, as you can save a lot of money by planning your trips during these low-demand periods. Also, try to avoid the busiest times of the year like major holidays, or popular events and conventions in your chosen destination.
Negotiating Room Rates And Upgrades
Business travelers can negotiate directly with the hotel or their booking agent to get lower room rates or free upgrades. This works especially well if you are repeat customers, part of a loyalty program, or are booking multiple rooms for a group. If you find a lower price for the same hotel on a different website, call the hotel directly and ask if they can match or beat the price. Some hotels may be willing to offer a discount or throw in extra amenities or upgrades to secure your booking.
Utilizing Price-Match Guarantees
There are hotel booking websites and hotels that offer price-match guarantees. This means that they will refund the difference if you find a lower price elsewhere. But be sure to read the terms and conditions carefully, and provide the necessary documentation to take advantage of these guarantees.
Using Loyalty Programs And Rewards Points
Signing up for a hotel’s loyalty program or using travel rewards points from credit cards can help business travelers save money on their stay at luxury hotels. These programs often offer exclusive discounts, room upgrades, complimentary services, and other perks.
Many hotel chains offer free membership, and points you’ve earned from your previous stays can be redeemed for free nights or other rewards. I will be talking more about hotel loyalty programs below in this article, so make sure you don’t miss it…
Considering Alternative Accommodation Options
Business travelers may also think about staying in alternative accommodations, including vacation rentals, serviced apartments, bed and breakfasts or guesthouses. These can often be significantly cheaper than traditional hotels, especially if you stay for an extended period. Besides, these properties may also provide a more personalized and unique experience.
Adapting To Plan Changes
Business travelers can save a lot of money when they remain flexible with their travel plans and adapt to changes as they arise. For instance, you may be offered a cheaper room if you are willing to switch to a different room type or location within the resort.
Luxury hotels often have different room categories. So if you’re happy with booking a room that has a restricted view or smaller size, you can get lower rates without compromising on service and amenities.
Book In Advance Or Last-Minute
Hotel rates can fluctuate based on availability, so booking well in advance or at the last minute can sometimes get you far better deals. Keep an eye on hotel rates – for these you may use price-tracking tools, as described above, to automate the process. You may also find attention-grabbing last-minute travel deals on apps like HotelTonight. Be prepared to book immediately when prices drop or you spot a great deal.
Leverage Credit Card Rewards
Many credit cards offer points or cashback on travel expenses, including hotel stays. Some cards also provide exclusive benefits like room upgrades, late checkout, or complimentary breakfast when booking through their travel portals.
Use Corporate Or Group Rates
When traveling for business, ask the hotel staff about corporate rates or special discounts for your company’s employees. And if you’re attending a conference or event, ask the organizer if they have negotiated group rates with nearby hotels.
Sign Up For Hotel Newsletters And Alerts
You can subscribe to receive last-minute offers by email from your preferred luxury hotels and travel websites. Hotel newsletters and e-mail updates typically contain exclusive discounts, flash sales, and promotions that might not be available to non-subscribers. These deals may end up saving business travelers a significant amount.
How Can Business Travelers Take Advantage Of Loyalty Programs To Save Money On Luxury Hotels?
Ever thought about scoring some sweet deals on luxury hotel stays? You can do just that with loyalty programs!
You can maximize business travel savings on luxury hotels when you enroll in loyalty programs offered by hotel chains. And once you’re a member, you can earn points every time you book a stay at the hotel chain’s properties or purchase products and services from affiliated partners. These points can be later exchanged for free hotel stays, room upgrades, and additional benefits, such as complimentary breakfast or access to the hotel’s executive lounge.
So here are great examples of strategies for business travelers so that they can optimize loyalty programs and save money on luxury hotels:
Join multiple loyalty programs
Sign up for multiple loyalty programs to stack up those points faster and find the best deals that meet your needs. Most programs are free to join anyway, so why not? You’ll receive member benefits, such as late checkout and room upgrades.
Stick to one hotel chain
Commit to one hotel chain if you can. This helps you accumulate points faster, which makes it easier to earn free stays or other perks that can help save money. Remember – the more you stay, the more points you earn!
Achieve elite status
Frequent stays can help you achieve elite status in a hotel loyalty program. This often unlocks even more great benefits, such as bonus points, complimentary breakfast, early check-in, and guaranteed room availability.
Choose a credit card with rewards points
Get yourself a co-branded credit card that offers rewards points – accumulate even more points by using the card to book your stay. These rewards points can be redeemed for free stays or other hotel-related expenses.
Book direct through loyalty program websites
Always book directly through the hotel’s loyalty program website or mobile app, rather than through third-party sites. Sometimes they throw in exclusive discounts and better rates that you won’t find anywhere else.
Transfer points from other loyalty programs
Got points from other travel programs like airlines or car rental companies? See if you can transfer them over to boost your hotel rewards. This can help you accumulate points faster on your hotel loyalty account.
Pool points with friends or colleagues
Some hotel loyalty programs allow you to pool points with other members, which makes it easier to accumulate more points. So team up with friends or colleagues who also travel frequently to maximize your combined rewards.
Redeem points strategically
Do your homework to get the most value for your points. Research the best ways to redeem them, for instance, for a free night during peak season or at a high-end property.
Leverage status matches and challenges
Got elite status with a hotel loyalty program? You may be able to leverage that status to obtain a status match or challenge with another program. Use it to access premium benefits across multiple hotel chains and save money on luxury hotel stays.
Book during promotions or flash sales
Many hotels extend promotional offers or flash sales exclusively accessible to loyalty program members. Keep an eye out for these deals as they often feature substantially discounted rates compared to regular prices.
Ultimately, even though loyalty programs are an excellent way for business travelers to save money on luxury hotels, it’s important to familiarize yourself with the terms of your chosen loyalty program so that you can maximize the benefits and earn points more efficiently.
Summing Up,
Utilizing different strategies, such as buying packages or using websites to book business trips can help save dollars on hotel expenses, and at the same time, you may personally benefit by staying at top-notch hotels. What’s more – you can also book a last-minute vacation for yourself, too!