Travel experts revealed concerns about the low number of hotel bookings going through travel management companies (TMCs) at a recent Association of Corporate Travel Executives (ACTE) forum in Dubai.
According to a report by Chris Pouney, director, Business Travel, Severnside Consulting: “GDS companies estimate that in Western Europe, for every 50 GDS-made passenger name record (PNR) for an air transaction, there is one hotel room night. For the Middle East this ratio is 1000:1”.
Pouney attributed this to the trend for booking hotels “via local relationships” in the Middle East.
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“Travel Managers despair as spend; volume and travel security data are not captured,” said Pouney.
“Resistance at local level is driven by a variety of reasons: culturally it is seen as a hospitable gesture to book a guest’s room. Bookers claim better rates are achieved locally, a claim refuted by the hotels.
Additionally, non-preferred hotels have been known to offer incentives to local bookers to capture additional business.
“The majority of hotel bookings in this region are made via consolidators (Wholesaler, DMCs). This buying pattern is often justified by the fact that agents have credit facilities in place,” added Pouney.
Hoteliers present at the forum were keen to defend their commitment to the best practice of rate parity — whereby the hotel offers the same rate with the same conditions regardless of the distribution channels used for booking — whereas TMCs asked “why shouldn’t they get a better deal in exchange for their services?”
Jumeirah Group vice president sales Thomas Grundner said: “Rate parity is the key to success —there should not be a different rate for TMCs and for a corporate if approached directly. It is a very important element for success. Rate is such a powerful element and we cannot go back and undo the good work that has been done over the last few years.”
Accor director of revenue management Bassem Salam said: “The key is rate parity – you have to have the same rates”.
Dec 17, 2012 , United Arab Emirates
Dear S, in my mind there are no problems if corporate rates are cheaper than DMC rates, it all depends on the room nights production of each accounts. With the markup on rate practiced by DMC companies over the recent years, which is largely that the 20-25% agreed by the hotel contract, it is all...
Dec 17, 2012 , United Arab Emirates
The discipline of revenue management has been forced to evolve very quickly because of changes over the past few years in online distribution. Unfortunately, until recently the educational efforts of the industry had not kept pace with advances in technology. As a result, hoteliers were not pre...