In each issue of Business Travel Executive, the members of our Buyer Think Tank offer their individual thoughts on what’s hot, what’s cool and what’s coming next in managed travel. 

The Think Tank is a team of eight veteran travel managers from programs that run the gamut in size and complexity – but each member contributes a unique viewpoint. Travel Buyer’s POV brings fresh perspectives and ideas to inspire innovation and thought leadership in the corporate travel industry.

There’s old saying about a thing being so elusive, it’s like nailing Jell-O to a tree. For travel buyers, getting a handle on dynamic hotel rates – with all their volatility and uncertainty – seems to fit that truism perfectly.

With hoteliers continuing to push this pricing structure, the members of BTE’s Think Tank see more room for ambiguity as they measure the impact of dynamic rates on their hotel programs.

Dynamic Rates: New Reality or Exercise in Futility? 

Mystery surrounds the question of whether or not dynamic hotel rates are real or phantom discounts. Hotels are promoting them more and more on the premise that overall, the corporate travel buyer will save money off best available rates (BAR). Marriott has announced that it will only offer dynamic pricing by 2026. Other hotel chains are also pushing hard to make dynamic rates the standard in the industry. Static rates are becoming scarce unless the buyer has very high volume.

So how do buyers know if there’s any benefit to dynamic hotel rate programs? Rates in online booking tools and the GDS systems change daily if not hourly, so the bottom line is that we can’t measure or audit dynamic rates. We are left to trust the GDS and the hotels that we are getting some savings. There is no guarantee I have seen that measures whether discounts are being applied. Unless or until that happens, I do not trust that dynamic pricing is a real advantage to the buyer. 
 – Mark Ziegler

The Search for the Elusive BAR

The idea of hotels offering discounts pinned to dynamic rates seems like a logical opportunity. It addresses market concerns, you can put a cap on rates for certain hotels within your travel program and you get a nice discount – or do you? As a buyer, I continue to ask hoteliers: Show me the money! Prove to me that you have saved me anything on a dynamic rate. What was the best available rate? 

How as an industry can we normalize this, when every chain calls their room types something different? It is convoluted and hard to quantify, which is what my internal finance stakeholders expect me to do. So can I support dynamic rates? Yes, if my savings can be proven. At the end of the day, I need to spend less on my program. I think most buyers agree and would be more open to dynamic rates if we had more transparency.
– Jennifer Steinke

Nothing Difficult is Ever Easy 

Every time I sit with a procurement lead who came up from a different category, they all say the same thing: “I hate when I must deal with travel contracts. They’re hard to track and typically require annual agreements – especially hotels.” To me, regardless of static or dynamic, it always hard to judge if you’re getting the best deal possible. 

However, that may be a result of my own personal experience, since for most of my career, I’ve worked in city centers where properties are likely to push extreme price changes up and down throughout the year. Do I think that dynamic hotel rates are real? Yes. Do I think they are easy to track? Of course not, but that’s the fun of sourcing travel.
 – Rosemary E. Maloney

Not a One & Done 

Dynamic rates might benefit companies with lower travel spend or those with frequent trips to markets with fluctuating rates, such as seasonal tourist destinations or oversupplied business hubs. To optimize a dynamic rate program, buyers should negotiate rate caps, secure discounts off BAR, and compare current rates with historical data.

However, to determine if these rates are truly beneficial, it’s crucial that corporate travel managers do extensive research, regular negotiation, and continuous monitoring. By staying proactive, travel buyers can ensure that their hotel programs continue to deliver savings rather than getting stuck with unexpected price hikes.