While the way hotels set rates for corporate and meeting group business have much in common, differences abound. So here is some corporate rate-setting insight for meeting professionals to bring to their future negotiations with hoteliers.

What’s a typical corporate rate program? A hotel agrees to give the corporate buyer a discounted room rate along with inclusions/considerations, with the contractual expectation that a certain amount of room nights will be provided inside of a year, said Trina Camacho-London, regional vice president sales-Americas, Hyatt Hotels. The benefits can extend chain-wide, with discounts not just in preferred hotels, and specific value-adds can include Wi-Fi, parking and special terms around deposits and cancellations, noted Betty Wilson, vice president, global sales, Starwood Hotels & Resorts. The request-for-proposal season is in full swing, with corporate rates and inclusions for next year generally finalized in the fourth quarter.

Because corporate rate negotiations can be lengthy and complex, a simpler, time-saving strategy is emerging. The “dynamic model,” Wilson explained, provides for a discount off “best available rate” across hotel brands in a chain, along with agreed-upon value-adds.

What goes into the corporate rate formulation? A host of factors, according to Camacho-London:
— How many room nights the account is expected to provide.
— The pattern of the account’s typical guest.
— Whether the account requires last room availability.
— The expected, average length of stay of the typical guest.
— Ancillary spend of the typical guest.
— If the account has any needs for meetings throughout the year.

Length and pattern of stay are particularly meaningful. Corporate travel is “99 percent midweek and very short length of stay,” said Wilson. A corporate program with a track record of heavy Sunday night arrivals would present a very different picture, she explained, than high-demand Monday or Tuesday night stays. Another key point for the hotelier: how strong is program compliance? “We’ll bend a little more because we know we’ll see the volume,” she noted.

Where do meetings fit in a corporate rate program? Hotels look at the amount and size of group business a specific corporate account will produce and expect that they will be able to compete for these meetings. “Does a customer have a strategic meetings management program and can direct that volume?” Wilson asked. Indeed, she is seeing more RFPs bring this “total value” of small meetings and corporate transient business to the negotiating table.

How do corporate and meeting rate-setting approaches differ? Meeting leads require a “more granular” negotiation, Camacho-London noted, as hotels evaluate a group’s utilization of meeting space and how it “layers” on top of other prospective or booked groups. Example: A corporate account of 500 rooms averages out to 10.4 room nights per week (assuming 48 business weeks a year). A 300-room group inside of a week can win or lose the week for the property, she cited, while 10 rooms from a specific volume account will rarely be acknowledged as that week’s difference.

What else is helpful to know? Vital information may be left fallow: why are the account’s typical travelers coming to the market and what can the hotel do to provide a heightened level of service to these guests? “The sharing of this information would be extremely beneficial to the property and have a reciprocal benefit to the corporation,” said Camacho-London. “With the hotel industry’s increased attention to personalizing every guest experience, this information would go a long way toward ensuring the corporate traveler” — who may also be a meeting attendee — “is comfortable, happy, engaged and enthused.” — Maxine Golding