Most hotels have a list of companies with negotiated rates. Few check, once a year, what each one actually brings. Some accounts fill your weakest nights. Others take your best nights at your lowest rate. On paper, both contracts look the same.
What We Look At, per Account
- Room nights per year, and the trend against last year.
- Net rate: what stays after commission and after what the rate includes, against your average on the same nights.
- Which nights: weekdays or weekends, high or low season, and how many fall on nights you sold out anyway.
- Promise against production: the volume the company quoted when the rate was agreed, against what it actually booked.
- Booking behaviour: lead time, length of stay, cancellations and no-shows.
- Extra spend: meetings and meals, counted as profit.
- Channel: direct, through a travel agency, or through a booking tool that charges commission. Compare net, not gross.
A Worked Example
An 80-room business hotel. From Monday to Thursday its average net rate is 118 EUR. On the nights it sells out anyway (trade fairs, congresses, the busiest weeks), it sells its last rooms at 165 EUR. Five accounts, last 12 months:
| Account | Room nights | Net rate | On sold-out nights | Books mostly | Decision |
|---|---|---|---|---|---|
| A | 620 | 112 EUR | 8% | Mon to Thu, all year | Keep, raise the rate |
| B | 410 | 98 EUR | 46% | Trade fair weeks | Fix the terms |
| C | 380 | 85 EUR | 2% | Sun to Thu, Nov to Feb | Grow |
| D | 45 | 105 EUR | 60% | Peak dates only | Drop the fixed rate |
| E | 150 | 101 EUR | 30% | Mixed, via a travel agency | Review in six months |
Room nights on other nightsRoom nights on sold-out nights
Coston sold-out nights
A2.7k EUR
B12.7k EUR
C0.6k EUR
D1.6k EUR
E2.9k EUR
How to Read It
- Account B books 46% of its room nights on nights the hotel sells out anyway: about 189 room nights at 98 EUR, on nights where the last rooms sell at 165 EUR. That is about 12.7k EUR a year given away on those nights alone. The account is not the problem. The contract is.
- Account C pays the lowest rate, 85 EUR. But only 2% of its nights fall on sold-out dates. Most of its 380 room nights come in winter, Sunday to Thursday, when the hotel has rooms to spare. This is the account to grow.
- Account A is the backbone: steady volume across the year, at a rate close to the market. It costs 2.7k EUR on busy nights and brings 570 room nights on the others.
- Account D books 45 room nights a year, 60% of them on peak dates, at a fixed 105 EUR. It brings almost nothing on quiet nights and costs you on busy ones.
- Account E books through a travel agency, so 10% commission comes off every booking. Check whether the volume justifies that before the next renewal.
Cost alone does not decide. Account A costs more on busy nights than account D, and is worth far more.
Four Decisions
- Grow: accounts that book your weak nights at a fair rate. Make it easy for them to book more: longer stays, a winter rate, a meeting package.
- Keep: steady volume across the year, at a rate close to the market. Renew.
- Fix: good volume, but too much of it on peak nights at a fixed rate. Change the terms, not the relationship.
- Drop: low volume, low rate, mostly on nights you sell out anyway. Let the contract expire, or move the account to your daily rate.
Contract Terms That Matter More Than the Rate
- Fixed rate or a discount from the daily rate. A fixed rate is fine on quiet nights and expensive on busy ones. A percentage off your daily rate moves with demand.
- Last room availability. If the contract guarantees the rate up to your last room, the account can take your last rooms on your best nights. Remove it, or add blackout dates for fairs, congresses and events.
- Volume and review. Tie the rate to the volume the company promises, and check it every year. If they book half, the rate changes.
- Seasons. A lower winter rate can win business you would not get otherwise. The same rate in summer gives money away.
- Commission. For bookings through agencies and booking tools, compare the net rate with your direct business.
On busy dates, a group request is the same question in a different form. See Displacement: When a Group Is Worth Saying Yes To.
How Often
- Once a year, before renewals. For most hotels that means autumn, for the year ahead.
- Every quarter, a quick look at the top ten accounts: volume, net rate and which nights.
- Sales and revenue look at the same numbers together. The GM decides.
We run this review with GMs as part of our Sales & Corporate Strategy work.