5 steps to take on your Corporate Accounts before the RFP season


With the RFP season approaching it is time to review your corporate accounts and decide your actions moving forward. So here are the five key activities you need to undertake.

1.   Evaluate the accounts

You need to review how the accounts are performing in terms of the contribution to your business. So some of the things to consider are:

  • Room Nights stayed – how many room nights has the account produced? Is this more or less than you were expecting, wanting or hoping for? Is this a good thing? What sort of production are you expecting or wanting for next year?
  • Arrival Day and Length of Stay – Accounts where the guests arrive on a shoulder night e.g. Monday and stay longer e.g.  3 or more nights are good for business even if the rate is lower. Which of your accounts produce this pattern of business?
  • Seasonality – a continuous steady pattern of bookings or business in trough months is good for the hotel, whereas an account that only books in peak months is less valuable.
  • Additional Revenue – what else do they spend money on? Dinner? Conferences? It is important to consider the total value of the business from a corporate company not just the room revenue.
  • No shows and Cancellations – Can you rely on the business or do you get no shows and late cancellations making it harder to fill the hotel? Can you discuss with them why this happens and what can be done to minimise this so that you are both benefiting from the contract?
  • Payment history – are they paying promptly or using company credit cards so you get the money in the bank promptly? Or are they late payers and this is causing concern?
  • Booking Channels – how is the business booked? Is it thought channels which are cheaper for you or are you paying a lot to receive their bookings?
Based on this information you should now know which are your best accounts that are important to you and which are of lesser importance. This will influence what you do next.

2.   Rate Structure

It is important to have a clear corporate rate structure which has logic based on your public rates and has integrity within it. So higher producing more reliable accounts should logically be on a lower rate than a low producing unreliable account. Your best customer would expect that if they found out what the other corporate accounts were paying.
Ideally your highest corporate rate should not be higher than your lowest public rate. If the corporate rate for a company is £80 and you offer a public flexible rate of £70 for the same product, how does the company booker feel? Other alternatives are to have a corporate rate that mirrors your flexible rate or guarantee that the company can have access to the rate when it is available – even if they have already booked.

3.   Agree the negotiation guidelines as a team.

In a hotel there will be a number of stakeholders interested in the rates for the corporate accounts. The Revenue Manager will want the rates to increase to help achieve a growth in revenue and may also want to limit the production of lower rates higher volume accounts. The Sales Manager will want to be able to re-negotiate the contract and keep the business (it is easier to keep an existing client than find a new one). The General Manager will also have a view on what is best for the business. So it is important the all the accounts are discussed and reviewed as a team and the output is a negotiation structure for the Sales Manager.
For each account you should have the rate you would like to negotiate to (Wish), the rate you would be happy to keep the business at (Want) and the rate below which you do not want the business (Walk). Be sure to be honest about the latter. It is often difficult to get back business you refuse when you really do need or want it.

4.   Last Room Availability (LRA)

This is a requirement for being in the programmes of many of the larger corporates and agencies. This means that whatever is happening in the market to your public rate then the company can always get a room, if you have one available, at their rate. So in peak times you cannot refuse their business. If the evaluation is done effectively as described in point 1 and you know their arrival and stay patterns then you will be clear for which accounts you are willing to include this benefit and for which accounts this is a risk for your business.
Ideally accounts for which LRA is included will be at a better rate than those accounts which do not include LRA.

5.   Written Agreements

All companies with which you have an agreed rate should have a written agreement with you. The key things to include in the agreement are:

  • Rates for normal and upgraded room types – you should be able to included two tiers of rooms at least.
  • Expected or minimum number of room nights to be booked by the company.
  • Is the rate commissionable?
  • What channels can the rate be booked through?
  • Does in include LRA?
  • How and when do you expect to be paid for the business?
This is an overview of what hotels and Revenue Managers need to consider, particularly before the RFP season, so if you need more information on any of the items raised in this blog then do get in touch.

This article was posted in Corporate Accounts, Hotel revenue management. pricing structure, LRA, Revenue Management, RFP. Bookmark the permalink. Follow comments with the RSS feed for this post.

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