10. april 2021

Hotel Negotiated Rate Agreement

As CEO of Event Temple, a modern hotel sales and catering software company, I spend most of my days making hotels more organized and profitable, while making life more enjoyable (and productive) for hotel sales and catering managers. Recently, we have been deeply immersed in a discussion about NRL agreements and NRL follow-up. Another reason why volume contracts are so important to hotels is that they are more predictable than temporary transactions. A fixed amount of NRL business planned for the entire calendar year and planning for each month of peak travel in advance is incredibly helpful in understanding where you fill the spaces and spending your marketing dollars. Knowing when popular travel times for some contracts are in advance will help your hotel boost demand and increase the value of your remaining rooms. And the NRL business allows you to have more flexibility in pricing in group and transarries activities, as well as in seasonality planning, by tailoring your rates as needed. Now that I have outlined what LNR is, I would like to share my thoughts on the future of NRL, corporate accounts and key accounts. Currently there is a big problem with key account tracking -> it is manual. This year`s hotel-request season for this year`s proposal, which is currently underway, will be more than any other, thanks to the impact of the De Covid 19 pandemic on the industry and the resulting uncertainty. Still, the average U.S. business bargaining rate in 2021 will decrease by 20 percent from 2020 from the previous year, to 25 percent, predicted industry expert Bjorn Hanson, associate professor at the New York University School of Professional Studies Jonathan M. Tisch Center of Hospitality, in his annual analysis.

We all know that the cost of acquiring a new customer is much higher than the cost of engaging an existing customer. NRL contracts not only ensure new business over a longer period of time, but also promote reproducibility activities by establishing this relationship between your hotel and the organization. According to the report, a new theme in this year`s negotiation process is the inclusion of a contractual obligation for sanitary practices, but “compliance with these standards has so far been inconsistent throughout the hotel industry.” Hanson said that if it is an employer in a city that uses a hotel, it is not difficult to impose. But “if it`s a national brand and travellers travel across the country, the brand can hardly agree because it can`t be implemented with 100% certainty,” he said. Although his report lists four key approaches to interest rate negotiations this year, Hanson thinks the hybrid model – a negotiated rate 10 to 20 percent lower than the 2020 rate or the best available rate, depending on the lower value – is most useful, he told BTN. The challenge is that the property management systems of many hotels are not really put in place for this purpose. The report also notes that most fees for urban and urban stations have been suspended because the services used to justify these charges have also been suspended. The same goes for some amenities such as gym access or breakfast, which are not necessarily negotiated in rates this year.

However, some hotels offer a daily health supplement of 2 to 12 dollars, as cleaning has been increased and the cost of personal protective equipment and operating practices, such as allocating any other room and leaving rooms for one night between stays, such as health measures to reduce exposure to Covid-19. While Amazon is still satisfied with the XYZ Hotel at the end of the year, the two agree to negotiate and sign a new contract for the coming year. If Amazon has used 200 room nights, the hotel may consider an even bigger discount in exchange for the same obligation.