Hotel strategy
You're likely to spend more, on any given trip, for hotel accommodations than for air travel. So paying attention to hotel rates is worth your time.
Hotels and other accommodations are much better than airlines at providing a satisfactory experience for business travelers: A really bad night in a business hotel is about as rare as a really good flight in coach. Price generally correlates with quality, and even the low end of the quality spectrum provides adequate comfort and convenience.
The rules
Instead of sticking strictly to price, you'll find it more useful to think about hotel categories that reflect a combination of price and features. Undoubtedly, you're most apt to stay in a business hotel. Sometimes, however, other options can provide either more value or a more pleasant experience. Here's my take on the main sorts of hotels you'll encounter.
Business hotels
Upscale business hotels constitute the great middle ground of the hotel business, with a wide price/quality spectrum. Unless you've been traveling on some other planet, you know the names well: Crowne Plaza, Hilton, Hyatt, InterContinental, Marriott, Omni, Ramada, Renaissance, Sheraton, Sofitel, Westin, Wyndham, and dozens of others, worldwide.
Midprice hotels
One of the "hottest" hotel market niches these days provides almost all the facilities and services of a full-price business hotel but at a sharply lower price range. The midprice niche includes two sub-segments:
Midprice full-service hotel chains are generally offshoots or variants on the big business-hotel chains, including Hilton Garden Inn, Holiday Inn, Courtyard by Marriott, Ramada, and Sheraton's Four Points.
A closely related segment-midprice limited service-provides almost the same facilities but a tad fewer services. This sub-segment includes Drury, Fairfield, Hampton Inn, LaQuinta, and a dozen or so others.
Budget motels
If you've ever had to stay in a small town along the highway, you've undoubtedly slept in a budget motel. They're becoming ubiquitous outside cities. Almost all recent growth has been from the large chains. However, you still see a few low-end independents along downtown highways bypassed by Interstates in some of the smaller cities.
Most of us know what we mean by a budget motel. Major brands include Comfort Inn, Days Inn, Econo Lodge, Holiday Inn Express, Motel 6, Shoney's, Super 8, Travelodge, and a bunch of others. Most of those brands are national throughout the U.S. and many are active in Canada, as well.
Boutique hotels
The prototypical boutique hotel is an older city-center property that has been refurbished to a degree that it can compete with newly constructed midprice and expensive business hotels. Rooms tend to be smaller than at newer competitors, and they usually have fewer business facilities than larger business hotels. However, many travelers have concluded that those disadvantages are more than offset by more individualized decor and especially a high degree of personal service from the staff.
Luxury hotels
The top-of-the-line segment includes such hallowed chain names as Fairmont, Four Seasons, and Ritz-Carlton, some well known independents, and hotels that retain a unique individual name even when they're part of a chain. Everything is opulent: rooms, lobbies, restaurants, shops, with personal services and prices to match. They're located mainly in big cities. They provide everything you could possibly want in a hotel—and probably lots of stuff you don't care about at all.
Resort hotels
Chances are that you'll encounter resort hotels, if at all, only when you're attending meetings or conventions at the resort. And in that case, your choice of hotel is made for you: Your only decision is whether to accept the official convention rate or try for a bigger discount through some other program.
All-suite hotels
All-suite hotels have gained much popularity with business travelers, and for good reason. Typically, you get 400-600 square feet of room, with separate "living" and "bedroom" areas, as well as at least minimal kitchen facilities. The living area provides lots more space to spread out your work than you find in the conventional room. And if you want to entertain a business visitor, you can do it in a more businesslike living room or office setting rather than across a possibly unmade bed.
Extended-stay hotels
A subset of the all-suite genre, extended-stay hotels cater to guests who stay five days or more. Compared with more conventional all-suite properties, most of them have more space, overall, plus larger, better equipped kitchens, often including a refrigerator, stove, and even a dishwasher. Most of the big chains have in-room Internet access, about three-quarters of it high-speed. Prices start at the high end of the budget motel range and go well up into the business hotel range.
Apartments and condos
Often, on an extended stay, you may prefer a real apartment or condo to a hotel, even an all-suite hotel. Although such short term apartment arrangements are sometimes called "vacation rentals," many are appropriate for business travel.
The strategy
Setting the standard
Setting a quality standard for hotel accommodations is straightforward. The industry provides a spectrum of price and quality points, with small increments between adjacent levels. The Official Hotel Guide publishes a widely accepted classification system for hotels, based on 10 levels. The cost of moving up from one notch to the next-from "Superior Tourist" to "Moderate First Class," say-is likely to be no more than about 10 to 15 percent. When you set a company standard, it's easy to specify "Moderate First Class" or "Holiday Inn or equivalent" for hotels and be sure of a reasonably consistent standard.
Common sense is probably more important with hotel choice than with any other major element of travel expense. You don't want your employees (or even you, yourself) to live it up in lavish accommodations, but you don't want to be in scruffy cheap hotels, either.
Location is often the main factor in selecting a hotel-sometimes the only factor. You may want to stay near an office or person you're visiting or a convention center. Other times you may prefer to be in a city center or near an airport. Sometimes, particular needs, such as free, easy, in-and-out parking will influence your location choice.
Loyalty vs. lowest price
In my experience, the pull of any hotel chain's frequent stay program is far less potent than the lure of airline frequent flyer programs. Although the big chains' elite frequent stay levels provide some significant benefits, they pale by comparison to frequent flyer upgrades. Accordingly, you're much more likely to spread your hotel business around among many different chains and individual hotels than you are your airline business.
You may want to select a preferred hotel chain-one that you use, preferentially, whenever it has a unit in one of your destinations and the price is right-or close to right. You'll generally settle on your preferred chain either because you like its position in the product/price spectrum or you want to build status and credit in its frequent stay program.
If you travel frequently, but to a small number of destinations, your best bet is to arrange some sort of preferential deal with an individual hotel in each of those destinations. You'll undoubtedly get a better deal directly from an individual hotel manager than you ever would through a chain-wide frequent stay or corporate program.
If your trips take you to many different destinations, you may want to consider a chain-wide deal with one of the larger chains. Select one in the price range you like and negotiate.
But, in my view, you'll pay less, on average, by forgetting a preferred-supplier deal and instead playing the various discount sources. As a small business, you probably can't generate even close to enough volume to warrant a really good corporate deal, anyhow, and the discounters can usually beat the run-of-the-mill corporate discounts you can get. Moreover, even a very large chain may not have enough locations to satisfy all your requirements.
Making the deal
As with air trips, the first step is to set a benchmark. Often, your benchmark hotel is obvious: a place where you've stayed before, one recommended by a client/customer/supplier, or the site of a meeting/conference you're attending. If that's the case, call the hotel, its chain's toll-free reservation number, or visit its website. Check for the best available rate—perhaps even book a room, since you can cancel if you find a better deal. If you know of two or three possible options, treat them the same way. In any case, you'll quickly develop a pretty good idea about the benchmark list price.
Once you've determined your benchmark(s), it's time to check the tradeoff options.
1. Check first for a lower price at your benchmark hotel. Find out if your travel agency's negotiated-rate program includes your selected hotel, whether one or more of the larger discount agencies/brokers handles it, or whether it's listed in a half-price program, and, if so, get the discount price.
Be careful to check cancellation penalties along with rates: Even the most lenient discounters now frequently require two to three full days' notice for a no-fee cancellation. You may also try checking your benchmark hotel in the directory of any half-price program to which you've subscribed.
2. If your benchmark seems expensive, you may also look-in the same places—for a better deal at a different hotel in the same general category as your benchmark.
3. Next, consider whether you need or would like a different sort of accommodation—or at least want to consider one. Do you need to keep costs to a minimum for this trip by staying in a budget motel or economy hotel? Would you like to find an all-suite hotel, or a boutique, or a B&B, or a luxury hotel, or even a nearby resort? Are you going to be in one place long enough to consider an extended-stay hotel or apartment rental?
4. If you're considering a budget motel, the best places to look are through the budget chains' own reservation systems or websites. In really small communities, you're probably better off starting with a Mobil or AAA directory. AAA also maintains a good search engine on its website, and many small hotels give an AAA discount of at least 10 percent.
5. For a special niche accommodation, the full-line discount sources deal with all-suite hotels, extended-stay hotels, and resorts through the same inventory lists as their conventional midprice, business, economy, and deluxe hotels. However, for such other niche accommodations as B&Bs or apartment rentals, check with one of the websites that specializes in arranging such accommodations.
6. If you're sure you won't have to change your plans, consider an opaque site such as Hotwire or Priceline. First, establish some sort of minimum price differential you'll accept to offset the inconveniences of the opaque site. I usually won't go for an opaque deal unless it's at least $25 a night under the best in-the-clear deal I can find, and if I really like a hotel, I'll up that minimum difference to around $50 a night. If you can't cut your costs by at least that much, the risks of opaque buying generally outweigh a trivial price gain.
On Hotwire, look for a hotel in the same location and quality/price level, and accept it if it beats whatever minimum differential you establish. On Priceline, underbid your best alternative deal by the differential you've established.
Alternatively, if you like luxury on the cheap, look for or bid the same amount of money you'd otherwise spend but aim for a hotel that is one or two classes above your other choice(s).
By Barry Otulugbu
