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How to Set Hotel Per Diems by City

Corporate travel policies are put into place to help guide employees with decisions when booking hotels and flights for business trips. These guidelines typically include a maximum price per night for accommodation, cabin class for flights, and other rules that help to control business travel costs without breaking the bank.

When creating a corporate travel policy, most companies pick what they see as a reasonable nightly hotel rate, and set that cap across all their employees’ business trips. The problem with this is that all cities are not equal and nightly hotel rates vary drastically in different regions.

When you set a blanket price of something like $300 per night, the hotels your employees stay at will vary drastically. It also means that some employees might always book rooms at $300 a night, even when they are in a city where hotels are much less expensive, and $200 a night can still get them a 4 star hotel.

Dynamic hotel pricing guidelines will solve both of these issues. It will allow your employees the same level of comfort no matter where they are traveling to, and it will ensure that they book reasonable hotel rates on every business trip.

What is dynamic hotel pricing? It’s real time pricing info that changes based on the city.

How dynamic pricing can create consistent comfort for business travelers.

Top biz travel cities info graphic (3)

*Source: Business Travel News 2018 Corporate Travel Index

With a regular hotel cap of $300 a night, an employee traveling to Atlanta, GA could stay at the InterContinental (about $247/night) or The Westin (about $274/night). These are both well-known, reputable hotels with tons of amenities aimed at business travelers.

If another employee was traveling to San Francisco with the $300 a night hotel cap, the same hotel brands can cost anywhere from $400 per night and up, depending on the time of year. These hotels aren’t overly extravagant by any means. They are a great option for your business travelers. But for under $300 a night, the only options available in San Francisco are some small boutique hotels and hotels with less than stellar reviews, far from the city center (where your employee’s meeting will most likely be).

In this scenario, an employee traveling to Atlanta is going to be comfortable, happy, and productive because he or she is staying in a hotel that caters to business travelers. The employee traveling to San Francisco is going to be uncomfortable, stressed, and less productive because he or she is staying in an unfamiliar hotel, without business traveler amenities, in a location far away from their meetings.

How dynamic pricing can save you money. Let’s look at this same example again. The two hotels in Atlanta are great options, and are under $300. But there are similar hotels with great business travel amenities for even less than the $247 price tag of the InterContinental. The Marriott is $194/night. The Grand Hyatt is $169. These prices are very reasonable and well under your $300/night cap. If your employee booked the Grand Hyatt for $169/night, they are saving you $131/night before taxes. That’s huge! And now letting your employee book a hotel slightly over $300 a night in San Francisco doesn’t seem so bad.

Setting dynamic pricing means that you’re acknowledging to your employees that you’re willing to spend more to ensure that they are comfortable when on the road. At the same time, you’ll be saving the company money by automatically setting lower nightly rate caps in cities that are more affordable.

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Using Lola’s dynamic pricing. With Lola, you can set a dynamic pricing policy in seconds. All you need to do is set a price cap in a city you are familiar with. For this example, let’s base it off of pricing in Atlanta. When I set the price cap in Atlanta to $200, I immediately see what price my employees should spend per night to get the save level of comfort in other cities. In Boston it’s $425, in New York it’s $517, and in San Francisco, it’s $321.

A dynamic pricing policy is the best thing for both your travelers and your bank account. It makes everyone happy, and with Lola, it’s super easy to set up. Want to see how easy it is?

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ABOUT LOLA

Lola.com is the simple solution for corporate travel management. Perfect for companies big and small, Lola uses powerful AI technology and 24/7 support to help business travelers book trips with ease while providing travel managers with simple tools to create travel policies, view budgets and monitor the business travel of all team members.

 

Published Date : September 7, 2018

Posted by

Emily Parker-Woodland