Executive Travel : A Broker Can Get You a Room at the Inn

Conventions and events are the bane of the average business traveler who needs to get to a city quickly on short notice. Often they can appear to usurp every available hotel room for miles around.

The advance publicity surrounding World Cup ‘94, for example, made business travelers fearful they wouldn’t be able to find rooms during June and July in game cities, many of which are major business travel destinations. As it turned out, hotel bookings have been less than expected, and most cities are wide-open, said Kathryn Cochran, spokeswoman for the Washington-based Hotel & Motel Assn.

Last month, Los Angeles psychiatrist David Turken tried to attend the American Psychiatric Assn.’s annual meeting in Philadelphia. Though he had already purchased an airline ticket, he was not able to find a room.

“They were completely sold out,” he said. “I could have gone, but I would have had to stay way out of town.” After weighing the prospect of commuting in rush-hour traffic in a city he didn’t know to attend early-morning breakfast meetings, he decided not to go.

Business travelers who encounter difficulty finding rooms during peak travel seasons do have some options.

One that is gaining in popularity, especially among small and medium-sized companies with limited travel budgets, is to use a discount room broker or “consolidator” to find space.

Discount brokers grew out of the overbuilt hotel market about three years ago, said Robert Diener, president of Dallas-based Hotel Reservations Network, one of the oldest and largest of the discount brokerage services. Because of the surplus of rooms, average occupancy rates were running in the mid-60% range, he said.

Hotels, which need about 70% occupancy to break even, were looking for ways to book more rooms. Consolidators offered them a way to guarantee a certain number of room sales every year, he said.

Discounters buy blocks of rooms from hotels on an annual basis, then resell them to the public at prices far below the hotels’ regular rates.

Because the discounters buy in large volumes, they are able to get the rooms much cheaper than an individual could. They also get a commission on each room they sell.

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Hotels sell blocks to discounters because it helps guarantee income during off-peak times, Diener said. The consolidator, in turn, has rooms to sell during prime travel seasons or special events.

Discount hotel rates can be as much as 40% lower than corporate rates.

For example, a first-class room that normally books for $150 in New York City could cost as little as $69 through a discounter. A luxury room that runs between $200 and $300 starts at $109 through a broker, Diener said. Economy rooms that regularly run $90 a night start at $59.

There are a number of discount brokerage services, many specializing in certain cities or certain types of accommodations. San Diego, San Francisco, Chicago and Charleston, for example, have room brokers that specialize in those cities. Hotel Reservations Network offers rooms in 22 cities, including Los Angeles, Seattle, Chicago, Atlanta, Dallas, Washington, Boston, Orlando, Honolulu, London and Paris.

The brokers are not heavily advertised, and most people find them through specialty travel publications or word of mouth, Diener said.

Often the local chamber of commerce or convention and visitors bureau will know of booking services for an area.

When using a consolidator, always ask about the cancellation policy and make sure you understand when and how you can get a refund if your plans change. Most booking services, like many hotels, will not refund your money if you cancel your reservation within 24 or 48 hours. Also, use a credit card when making your reservation so that if you need to cancel, you can have the money credited to your account instead of waiting for a check.

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Bookings through consolidators have multiplied five- to tenfold in the past two years, Diener said. And one of the fastest-growing customer segments is the small to mid-sized company with a tight travel budget.

Large corporations can negotiate rates directly with hotels, Diener said. But small and mid-sized companies can’t offer hotels the volume of business they would need to get a discount rate.

Another strategy for finding rooms in a tight market is to call the city’s convention and visitors bureau. Some bureaus, such as the one in Phoenix, will actually help you book a room, said Gary Sherwin, spokesman for the Los Angeles Convention & Visitors Bureau. Though most don’t act as booking agents, they can give you the names of hotels to try in nearby cities and offer transportation alternatives.

You can often find a room in a suburb of the city you’re traveling to, Sherwin said. “Usually it’s just a few minutes away, but because it doesn’t have the same name, people don’t know to try it.”

For the more adventurous, the bureau can also give out names of alternative lodging, such as hostels.

Though they are most popular with students, hostels sometimes attract European business travelers looking for an authentic regional experience, Sherwin said.

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Travelers can also try corporate apartments. Though these are typically for longer-term stays, they occasionally stand in as hotel rooms when hotels are booked.

One last word of advice for travelers who think they are shut out of certain cities: Keep trying.

For most events, no city is ever completely booked, Sherwin said.

“Very often, (the events) get so hyped up, people are afraid to come to the community,” he said, “but it’s not a sellout, despite what people are thinking.”