hotel

Hotel Lingo Every Business Travel Manager Should Know

Every industry has its own terms and words they use. It is important to know the lingo for your specific job or career path and the other industries that you may interact with on a day-to-day business. Business travel managers interact with people in a lot of different industries, such as those involved in business, airports, and hotels.

One may think that hotels don’t use a ton of different words while booking a reservation, but there are some words that you might not understand if you are not in the hospitality industry. Let’s talk a bit more about some of these words that a business travel manager specifically should know.

Why Is It Important for a Business Travel Manager to Know Hotel Lingo?

First, we should probably discuss what a business travel manager is and what they do. Basically, a business travel manager plans all of the different aspects of a business trip. This includes flights, car rentals, hotels, and reserving spaces for business meetings. Business travel managers also formulate corporate travel policies which set the rules for business travel. They then use this policy to plan business trips purposefully and within the budget and policies that they have set out.

Having at least some knowledge of basic hotel lingo is necessary for business travel managers. If they don’t know what they are talking about or don’t understand certain terms when trying to make a reservation, they could make a mistake or not get a good rate on a room. So, let’s get cracking! Here are 16 words in hotel lingo that every business travel manager should know.

1. Corporate Rate

The first bit of hotel lingo a business travel manager should be familiar with is the phrase ‘corporate rate’. This is a special rate that is negotiated by the business travel manager and the hotel that is exclusively for guests staying at the hotel on business. If a business travel manager doesn’t ask for or negotiate a corporate rate, they could be missing out.

A corporate rate at a hotel is usually at least 10% lower than the rack rate, or the normal rate of a hotel room. Hotels can afford to charge businesses less because of the chance they have of getting more bookings through the company.

2. RFP (Request for Proposal)

RFP is a common acronym that people working in the hospitality industry use that means ‘request for proposal’. An RFP is a request from the company that the business travel manager works for to a potential hotel for services such as hotel rooms or meeting rooms. By issuing RFPs, business travel managers can get offers from different hotels or vendors. With these offers, they can decide which hotels would work best within their budget and which would best serve their needs for the corporate trip. An RFP isn’t necessary for every trip, but if it is a larger or more complex event, an RFP would be very useful.

3. Shoulder Night

A shoulder night is a fairly common phrase used by hotel employees. Shoulder dates are days when a hotel is usually not booked fully, and often fall next to high-demand dates. The most common shoulder nights are Monday, Tuesday, Wednesday, and Thursday. Since these dates are usually less busy, they are good for corporate trips, and you can usually book rooms on these days for a lower rate.

 

4. Incidental Charges

The phrase ‘incidental charges’ is one that every hotel goer should be well aware of. Incidental charges are the costs on top of the rate for a hotel room that aren’t bundled into the main hotel bill. Some examples of incidental charges are parking and valet services, Wi-Fi, laundry services, and room or other dining services.

Usually, at the beginning of a stay, the hotel will require that guests put a card on file to cover any incidental charges they may incur during their stay. Business travel managers need to be aware of incidental charges so that they can factor them into their budget for the trip.

 

5. GDS (Global Distribution System)

GDS, which stands for global distribution system is a network that business travel managers can use to book everything for a corporate trip, from flights to rental cars to hotel rooms. It is pretty much a database that business travel managers can use to compare and book all travel items. There are different companies that provide consumers access to a GDS such as Apollo, Amadeus, Galileo, and Pegasus.

While using the global distribution system, there are some terms that users need to be familiar with such as the GDS rate audit. A GDS rate audit is kind of like an RPF in the fact that it checks the rates of different travel services, but the difference is that the GDS rate audit makes sure that suppliers, like hotels, apply the discounts that they say they will to their corporate clients.

Another tool that is used in a global distribution system is an OBT (online booking tool) or OBE (online booking engine). An OBT or OBE is a single entry point that handles all booking needs a company may have. These are one of the main ways that companies save money and time. Business travel managers just need to plug in their requirements, budget, and date and the booking tool will do the rest of the work.

If business travel managers use GDS, they will also need to be familiar with chain codes that identify different hotels within the system.

6. Hotel Attachment

When a booking has a hotel attachment, that means that it is linked to another booking such as a flight or rental car reservation. If a hotel reservation is attached to a different travel reservation, it is not usually booked directly through the hotel or a travel agency, which means it could be less expensive than the normal rack rate. It also increases the amount of data that suppliers have, which aids them in future price negotiations. Booking as a hotel attachment can also save business travel managers a bit of time since they can just book everything at once instead of going through multiple websites and companies.

7. Leakage

The understanding of leakage in business travel and hospitality is very valuable to business travel managers. Leakage can also be termed as ‘invisible spending’ and is basically spending that happens in an unapproved channel outside of the company’s corporate travel policy.

Leakage makes it harder for business travel managers to keep track of expenses on a corporate trip and often leads to overspending as well as breaking the travel policy put in place by the company. If leakage is occurring at a company, it is crucial that business travel managers find a way to stop it as soon as possible to ensure that travel policies are being followed and stay within budget.

8. Hotel Rate Parity

Hotel rate parity is charging the same rate across all channels. This is helpful to business travel managers because different OTA’s or online travel agencies charge different commissions, and when there is hotel rate parity, the consumer is charged the same amount regardless of how much the commission would be.

Although the practice of hotel rate parity is beneficial to guests and booking agents, it can be harmful to hotels as they lose out on the commission that agents take out. The concept of parity in hotels can also go beyond the rate of a room and can also apply to the quality of the stay or the service.

Encore Corporate Travel - Agent Advising potential passenger on options - 2022.

9. Blackout Dates

The term ‘blackout dates’ is not only used in the hotel industry but in other industries that deal with reservations as well. In the most simple terms, it is a period of time where the discounts that customers can normally receive do not apply. Blackout dates are usually dates when the hotel excepts to be fully booked like during holidays such as Christmas, Thanksgiving, or the Fourth of July.

Corporations and businesses usually get discounted rates at hotels simply for the amount of business they bring in. However, hotels do not want to miss out on the revenue that could come from charging full price during busy seasons when everyone is needing places to stay.

10. Folio

A folio contains a record of all the charges and payments made during a guest’s stay in a hotel. Understanding what a folio is, how to read it, and how to interpret it are necessary skills that every business travel manager should have. As a business travel manager processes the information found in a folio, they are better able to see where employees are overspending or underspending on trips and adjust their budget accordingly.

11. Rack Rate

The rack rate is the flat rate of a hotel room without any discounts or incidental charges applied. If a business travel manager knows the rack rate, they will be able to see which hotels will offer them a better discount and use their company’s money as frugally as possible while still providing a positive and beneficial experience to their employees and others they are doing business with on the trip.

12. Consortia Rate

A consortia rate is similar to a corporate rate as it is a discounted rate that an agency and hotel agree upon. Consortia rates are formed a little differently than corporate rates, as it is usually an agreement between an agency and a hotel instead of a business and a hotel. Travel management companies can also add different packages and add-ons to a consortia rate.

13. Net Promoter Score

A net promoter score is one way to measure the quality of a product by seeing how likely guests are to recommend the hotel or services to others. Hotels may have a lower net promoter score if they are newer, however, if a hotel has a high net promoter score, it usually indicates that the hotel is of good quality. Business travel managers are able to book new hotels with confidence if they have a high net promoter score.

Encore Corporate Travel - Net Promoter Score Chart - 2022.

14. Per Diem

Per diem is the amount of money an employee is allotted to spend in a day while on a corporate-funded business trip. This money can be used to cover expenses such as meals and transportation. The way that companies provide per diems to their employees can differ. Some companies give their employees a fixed rate to spend a day. Others are very particular about what they cover and only provide partial coverage of expenses while other companies just give employees a credit card to use.

A credit card is most convenient for employees and employers. With a credit card, employees will not need to pay anything out of pocket, which in turn means that employers will not need to handle any of the paperwork that goes along with giving out reimbursements. Something that employees need to be aware of as well is that if they spend anything above the per diem rate, they will need to pay taxes on those expenses.

15. Duty of Care

Duty of care is another important term to be familiar with. It is the obligation that hotels and employers have, both legally and morally, to take care of their employees while they are traveling for business. This entails making sure that employees are safe, comfortable, and well-fed during their corporate trip. It is essential for business travel managers to understand the idea of duty of care and give it to the employees they are setting up travel for because if they are found to be negligent, they and their company could face a lawsuit.

16. Guarantee

A guarantee is when hotels run a credit card when they receive a booking, usually through a system such as a GDS. This way, hotels can make sure that there are no problems with the card before the guest arrives, and it is pretty much a standard process in most hotels. When hotels do a guarantee check, they don’t charge the card; it is mostly to make sure that the payment will be secure and go through when the guest checks out.

 

Now that you have it down, you’re good to go!

You won’t be confused in your next industry conversation or hotel booking.