Chris Baker, MD of UK Enterprise at SAP Concur reveals the optimum times to secure the best rates
The best laid plans – is there even such a thing when it comes to business travel? Last minute travel is not only unavoidable but inevitable. It is often out of your control – meetings change; flights are delayed or cancelled; clients need you.
According to a SAP Concur report released last year, these eleventh-hour bookings can cost you more for flights, but last-minute hotel bookings buck this trend. Looking at booking windows of 0 days, 0-3 days, 4-7 days, 8-14 days, 15-30 days and 30+ days, SAP Concur’s 2017 hotel data for EMEA shows that the lowest median rates can be found 0-3 days out, but most rooms are booked 15-30 and 30+ days out. Quite simply, travellers are losing money by booking earlier than when prices are at their lowest.
Booking Trends in EMEA
Figure 1 is a simple summary of the percentage of room nights booked, by days prior to the stay, for EMEA in 2017. The largest share of bookings is made between 15- 30 days before the stay. However, further data shows that the best rates are to be found when booking between 0-7 days before an intended trip, so there is a balance between inventory and price to be struck when booking.
Can Booking Early Save You Money?
Figure 2 charts the pattern of room rates per quarter, relative to the median price in 2017. While booking 4-7 days before the intended stay may save money as prices dip below the average, if you book within Q1, the room rates are already below the median price and will only fall. The significant difference between Q1 and Q2-4 is likely explained by the higher rate of travel towards the end of the year, as we found in our previous research around busiest travel days. The savvy traveller could save money by travelling in Q1.
Last Minute Bookings for Quick Trips
From figures 1 & 2, we can see that people booking last-minute rooms are getting a good rate for doing so. Providing further context, the above (figure 3) details the average length of stay for each booking window. Those that are booking last-minute, between 0-3 days before a trip, stay on average only 1 to 2 nights, suggesting that these types of stays could be trip extensions. With the savings on offer, this data could prove the basis for full, slightly longer trips to be booked closer to the time rather than merely extensions – useful information for trips where room availability is expected to be high.
Booking Habits in the U.K., Germany and France
Above, we can see the breakdown of room rates for the UK, France and Germany by booking window. While the prices across all three countries gradually drop to around the median rate leading up to 8-14 days before booking, interestingly, rates in Germany hold slightly higher than the median until 4-7 days.
All three countries then experience a significant drop between 0-3 days. However, prices in Germany are only 13 per cent below the median whereas the UK sees a larger drop to -26 per cent. Germany certainly holds truer when it comes to price fluctuation, but travellers and travel managers would do well to book later there in comparison to France and the UK.
We can delve into this data on a more granular level by looking at the type of hotels that are being booked from 30 + to 0 days before a stay, splitting between high-end, medium and low-tier establishments in London (figure 5), Frankfurt (figure 6) and Paris (figure 7). We define high, medium and low-tier hotels within each city by dividing the average daily rate into three equal tiers.
While prices in high-end Paris hotels see a consistent drop in prices with a slight peak at 0 days before a stay, the average rate is between 50 and 90 per cent above the median – far higher than the percentage above median in both Frankfurt and London and worth avoiding if possible.
By comparison, the rates in Frankfurt suggest that travellers who are booking late will opt for a mid-tier hotel, therefore driving up demand and bringing the average price up to within 9 per cent below that of the price of a high-tier when booked at 0 days. With the duty of care balance in mind, it could fare travel managers well to bump those on the move into high-tier hotels.
For those looking at London, lower-end hotels are noticeably cheaper than the average price in either of the other two cities and holds a remarkable consistency in comparison too – making this a worthy option for travellers with the experience to find a good establishment in that bracket.
Scoring the Best Prices, Last-Minute:
Despite travellers’ best intentions, they don’t always have control on how far out they book a room. Therefore, here are some things to keep in mind to get the best room rates:
• Book within the cancellation period A hotel’s cancellation typically falls between 24 to 48 hours in advance making more inventory available for lower rates.
• Sign up for hotel loyalty programs: Regardless of when you book, loyalty programs often offer upgrades not available to others.
• Avoid a one-size-fits-all approach. As the data shows, last-minute hotel trends vary from city to city, so use this data accordingly. Plan ahead for times of the year such as November, when last-minute travel is more likely.
By looking at this information, one trend stands out in terms of importance: the power of data. This is an overview of all Concur bookings last year in these three countries and cities, allowing us to pull out some important, overarching trends.