Are hotel booking agents agents the way forward?

16 August 2007
Are hotel booking agents agents the way forward?

The dynamics of corporate hospitality have changed over the past few years as a greater number of procurement departments turn to hotel booking agencies (HBAs) to manage their external events programmes. The main reason for this is financial transparency, although agencies also offer expertise that companies find reassuring. They can also arrange bookings at short notice and, with lead times becoming shorter, this can be invaluable.

"More companies are using booking agents for venue bookings because the process then becomes a managed expenditure and it offers transparency," says Louise Lowe, head of sales at booking agency Conference Care. "It gives hotels and venues access to information about their clients' budgets that, historically, wasn't available, enabling them to plan better and therefore maximise the opportunities."

She adds: "Shorter lead times are presenting a challenge for venues. We often get bookings that need to be arranged for the following week, and larger bookings can be requested six months in advance - as opposed to one year or 18 months."

Unlike travel management companies (TMCs), which tend to deal with all the travel arrangements for large organisations, HBAs are specialists in the hotel and hospitality trade and are not generally tied to specific venues.

Despite the 8% commission cost, engaging the services of such an agent is a convenient option for hotels and other venues at a time of heightened competition from less conventional venues - in London, for example, these include Madame Tussaud's, Vinopolis and the London Eye.

Lowe says: "Clients always want something new, and this is where we come into our own - because it's our business to know the latest events and to offer them ideas."

Peter Ducker, executive director of the Hotel Booking Agents Association (HBAA), observes that "hotels host a significant proportion of conferences and meetings in the UK" - and, with 20% of these now booked through HBAs or TMCs, it's important to pick the right agency to drive business. Operators should assess types of business they want to attract and establish which agencies best represent that market.

Grant Appleton, commercial director of Hotel Reservation Services (HRS), says that, traditionally, independent properties have found it difficult to break into the corporate hospitality market as TMCs have been largely inaccessible to them. However, in the past five years, as procurement departments have taken over from travel managers, the market has opened up. "We deal with independents as much as big chains," Appleton says. "We don't prioritise in terms of size."

For venues to be considered for hosting an event, they must, of course, attract the client's attention - and for independent groups, especially, this can sometimes present a challenge.

For example, the luxury country hotel Chewton Glen in Hampshire, enlisted the help of agents to rekindle its flagging corporate business. Sales development director Lisa Lernoux-Dock says: "There were misconceptions flying around suggesting we weren't corporate-friendly, and we had to reverse this. In the past five years, our business has doubled through word of mouth and by changing people's perceptions of the hotel. Fifty per cent of bookings now come via agents."

This word of mouth has largely circulated through the hotel attending events and joining the HBAA, which holds regular forums and meetings giving agencies and venues the opportunity to showcase their businesses. However, Lernoux-Dock adds, direct contact has been equally productive. "The key is getting people to come and visit us," she says, "because around 85-90% of customers who see us book with us."

On the whole, major hotel groups such as InterContinental, Hilton and Marriott, all of which are members of the HBAA, hold HBAs in relatively high esteem - as does the Brewery in London, which has four preferred supplier agreements (agents) to drum up business. General manager Claire Lawson says: "We've always had a proactive approach to venue booking. We meet booking agents, and our sales managers regularly liaise with clients, so it's a combination of both - 30% of our bookings come through agents."

Having a unique selling point (USP) is also important. Martin Wheeler, executive director at Venue & Hotel Finders, says: "A lot of hotels use companies which organise events for them, because activity events are very popular. For example, a trip to the London Eye, or dinner organised on a boat on the Thames."

Ambience is also important when choosing a venue, so the quality of the meeting space is crucial. Location and value for money are the other key elements, according to the experts, although a venue is often simply chosen because it fits the image of a company or because it's comfortable.

An online presence is also considered to be vital these days, as an increasing number of bookings are made through this channel, either directly or through booking agents. HRS has a system that allows registered clients to browse available venues themselves. Appleton explains: "We offer clients their own portal to our data. It's a simple model, where we don't charge the client a transaction fee but rely totally on commission from the hotel. The client can also search online against their specifications - which works for both overnight accommodation and meeting rooms - and their choice can be booked through the system at no charge to them."

It's important to keep your options open, and ensuring that your product is available via a number of routes can be a worthwhile exercise as competition for corporate hospitality increases.

According to Mintel, the UK corporate events market is expected to increase by 5% to a forecast peak value of £1.31b by 2012, so now might be the time to start analysing your options to take full advantage of this lucrative market.

Top tips

Kevin Doran is a director at Deloitte and specialises in procurement. He offers the following advice to hotels.

  • Lead times are getting shorter, and venues must become increasingly flexible in what they offer.
  • Provide a menu of options and prices from minimum specification upward.
  • Structure your service specifications in a transparent, user-friendly way.
  • Be able to explain why the cost of providing one option is significantly higher than that for another, and be able to justify different price elements.
  • Use technology-supported tools to provide transparency and information.
  • Suppliers should have a website with customer-specific links providing key ordering information.
  • Provide references and site visits.
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