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HoReCa KB

Working with Corporate Clients and Travel Agents

Series: Hotels — Operations Level: Strategic Audience: Sales directors, hotel GMs, revenue managers

Why Corporate Is Your Most Valuable Segment

Section titled “Why Corporate Is Your Most Valuable Segment”

Corporate travelers move year-round. They don’t care whether it’s peak season or trough, whether it’s raining or sunny. They fill rooms on weekdays and in the off-season — consistently and predictably.

Additional advantages:

  • Stable cash flow: An LNR (Local Negotiated Rate) contract means a guaranteed minimum of room nights per year
  • Lower cancellation rates compared to OTA bookings
  • High TRevPAR: Business travelers often dine in the restaurant, use parking, order room service, and charge to the room — all additional revenue beyond the room rate
  • Loyalty: A corporate client who receives genuinely good service becomes a multi-year partner

Negotiating tip: When pitching to a company, emphasize TRevPAR — the total revenue generated per guest visit, including F&B, spa, and parking. A client with high TRevPAR justifies a discounted room rate because they more than make up for it through ancillary spend.

Part 1: Corporate Clients

Section titled “Part 1: Corporate Clients”

Types of Corporate Rates

Section titled “Types of Corporate Rates”

Static CNR (Fixed Corporate Negotiated Rate):

  • Fixed price locked for one year
  • Typically 15–20% below rack rate
  • Preferred by clients for budget predictability
  • Disadvantageous for the hotel during high-demand periods

Dynamic CNR:

  • Formula-based: BAR minus X% (e.g., BAR − 15%)
  • Rate moves with the market — client always gets a discount, but the size is fixed
  • Recommended format: protects the hotel’s margin during peak periods while still delivering a consistent value to the client

LNR (Local Negotiated Rate) Contract:

  • An agreement tied to a specific volume commitment (minimum guaranteed room nights)
  • Enables demand forecasting months in advance
  • Often the most mutually beneficial structure for both parties

Step-by-Step: Acquiring a Corporate Account

Section titled “Step-by-Step: Acquiring a Corporate Account”

Step 1: Identify target companies

Who travels to your market and might benefit from a hotel relationship?

  • Companies headquartered elsewhere with local offices or regular project work in your city
  • Businesses located near your property (corporate parks, tech campuses, industrial areas)
  • Organizations that host regular conferences, training events, or annual meetings

Step 2: First outreach

A call or email addressed to the Office Manager, HR Director, or Travel Manager:

  • Introduce yourself and explain why you’re reaching out to them specifically
  • Lead with a concrete benefit: “We’re 10 minutes from your campus and have a dedicated corporate rate program”
  • Propose a next step: a meeting, a site visit, or an initial proposal

Step 3: Site Inspection

For larger accounts (20+ room nights per year), an in-person visit to the property is standard. Show:

  • The room product
  • Meeting and event spaces
  • Restaurant and bar
  • Parking facilities

A site inspection closes far more deals than a brochure.

Step 4: The Corporate Proposal

Your written proposal should include:

  • Room categories available under the CNR
  • Rate or formula (BAR − X%)
  • Rate conditions: refundable vs. non-refundable, minimum/maximum LOS
  • Included services (breakfast, WiFi, parking)
  • Contract term
  • Your direct contact

Step 5: Ongoing Relationship Management

Corporate accounts are long-term partnerships — not one-time sales.

  • Quarterly report of room nights delivered against contract
  • Renewal outreach 60 days before the contract expires
  • Holiday greetings, event invitations, product updates

Part 2: Travel Agents

Section titled “Part 2: Travel Agents”

How Agent Commission Works

Section titled “How Agent Commission Works”

Travel agents book hotels and earn a commission on the rate:

  • Commissionable rate: A rate from which the hotel pays a set percentage to the agency (typically 10–15%)
  • Net rate (non-commissionable): A lower wholesale rate on which the agent adds their own margin

Hotels that work well with agents are registered partners (with IATA number verification) and commit to on-time, accurate commission payment. That’s the foundation of the relationship.

What Agents Need From a Hotel

Section titled “What Agents Need From a Hotel”
  • Reliable, timely commission payments
  • Accurate and current room type and rate information
  • Fast response times (ideally within 4 hours on business inquiries)
  • A dedicated human contact — not a call center
  • Support on complex requests (group bookings, special arrangements, VIP needs)

GDS Registration

Section titled “GDS Registration”

To work with large corporate travel management companies (TMCs) — American Express GBT, CWT, BCD Travel, FCM — your property needs to be distributed through the GDS (Global Distribution Systems: Amadeus, Sabre, Galileo). This requires a channel manager integration, but it opens access to corporate travelers who book exclusively through managed travel programs.

Your Pitch to a Travel Agent

Section titled “Your Pitch to a Travel Agent”

“We offer a 10% commission on our BAR rate, a guaranteed 2-hour response window on business day inquiries, and a dedicated sales contact for VIP or complex requests. For groups of 10 or more rooms, we offer preferred rates and a complimentary site inspection.”

Negotiation Principles That Work

Section titled “Negotiation Principles That Work”

Don’t anchor on the room rate alone. Ask: “What matters more to your travelers — the room rate or the total cost of a stay?” A corporate client will often accept a slightly higher room rate if parking, breakfast, and WiFi are included.

Offer non-price benefits:

  • Guaranteed early check-in or late checkout
  • Room upgrade when available
  • Complimentary airport transfer above a certain volume threshold
  • Complimentary meeting room for X hours per month

Volume = leverage: The larger the volume commitment, the better the rate can be. Put minimum room night guarantees in writing — with cancellation penalties for significant shortfalls.

Never compare yourself to OTA pricing in a B2B conversation. It signals weakness and conflates two different value propositions.

Corporate Partnership Checklist

Section titled “Corporate Partnership Checklist”
  • List of 20–30 target companies within your primary market area developed
  • Standard corporate proposal template ready
  • A dedicated corporate sales contact assigned
  • Volume tracking system in place for each contract
  • Commission payment process documented (timing, method)
  • Quarterly contract review scheduled

Sources

Section titled “Sources”