Corporate rate contracts are the lifeblood of many hotels, offering a steady stream of business travelers and long-term guests.
NB: This is an article from Topline Revenue, one of our Expert Partners
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But navigating the maze of corporate rate shopping can be tricky. It’s a game of strategy, data analysis, and sometimes a little bit of luck. Whether you’re a seasoned revenue manager or just starting to explore the world of corporate rates, this playbook will guide you through the steps to mastering corporate rate shopping, staying competitive, and avoiding common mistakes along the way.
Step 1: Know Your Market Inside and Out
Before you even think about setting your corporate rates, you need to understand your market like the back of your hand. This isn’t just about knowing what your competitors are doing (we’ll get to that in a minute). It’s about understanding who your target corporate clients are, what they value, and what motivates them to book with you instead of the competition.
Don’t Just Look at the Big Guys
Sure, it’s easy to look at the major hotel chains and think you need to offer a corporate rate that’s competitive with theirs. But here’s the thing: they have deeper pockets and more resources than you. Trying to beat them at their own game isn’t the way forward.
Instead, focus on what you can offer that they can’t – whether it’s personalized service, unique amenities, or flexibility in booking. Your corporate rate should reflect these strengths, giving you an edge in the market.
And if you happen to be one of the big guys yourself?
Well, then it’s time to double down on what you do best. Sure, you have the resources, but that doesn’t mean you can coast. Make sure your corporate rates reflect not just your size but your ability to adapt, provide value, and meet your clients’ specific needs. Even the giants can get knocked off their perch if they aren’t paying attention to the details.
Step 2: Stay on Top of Competitor Pricing
Corporate rate shopping isn’t just about randomly checking what your competitors are charging. It’s about making sure you’re constantly monitoring their rates to understand where you stand in relation to them. This is where the strategy comes in. If your competitor drops their rates, do you follow suit? Or do you stand firm and let your added value convince clients that your rates are worth it?
The Art of Subtle Price Adjustments
While you don’t want to engage in a full-blown price war (that’s a race to the bottom, and trust us, no one wins), you do need to be aware of when and how to adjust your corporate rates. If you notice that a competitor has dropped their rates in response to market conditions, don’t automatically follow suit.
So, what should you do instead of just dropping prices?
Start by focusing on value, not just cost. Leverage your strengths—such as location, amenities, and service – to justify a slightly higher price, and consider adding perks that enhance the overall experience, like complimentary breakfast, free parking, or even late check-out. These small touches can make a big difference without eroding your rate integrity. You can also tailor your offerings for specific corporate clients, such as flexible booking options or customized packages that fit their needs. It’s not always about being cheaper; it’s about being smarter and providing more bang for the buck.
Step 3: Use Data to Your Advantage
Gone are the days when revenue managers had to rely solely on gut feelings and intuition. Today, you need data – lots of it. Corporate rate shopping tools can provide you with real-time data on your competitors’ rates, inventory, and even demand patterns. Use this data wisely to adjust your own pricing strategy and stay ahead of the game.
