The hotel procurement landscape is evolving rapidly. For decades, the annual hotel RFP was the standard model: companies invited bids, negotiated rates, and locked in contracts for the year. But in recent years, dynamic discounts-rates tied to public pricing rather than fixed contracts-have gained traction. Travel managers are left asking: Which model really works best for corporate travel-traditional hotel bidding or dynamic discounts?

This debate is shaping the future of corporate travel management. Both approaches have strengths and weaknesses, and the truth may lie in a hybrid model. More importantly, automation platforms like choosing between hotel bidding and dynamic discounts with automated RFP tools now make it easier to compare, manage, and optimize both strategies. With a modern hotel rfp tool, travel managers can avoid the pitfalls of either extreme and focus on what delivers the most savings and compliance.

How Hotel Bidding Works

Hotel bidding is the traditional method: companies send structured RFPs to hotels, receive bids, and negotiate discounted rates.

Pros

• Predictable pricing for budgeting

• Clear contractual protections (amenities, cancellation clauses, blackout dates)

• Leverage from room night volume

Cons

• Time-consuming to manage manually

• Fixed rates may not keep pace with market fluctuations

• Requires audits to ensure compliance

How Dynamic Discounts Work

Dynamic discounts offer a percentage off a hotel’s public or BAR (Best Available Rate). Instead of fixed rates, companies always receive a discount relative to what the general public pays.

Pros

• Flexible, adjusts to market changes

• Lower administrative workload (no heavy RFP cycles)

• Hotels often more willing to accept dynamic structures

Cons

• Less budget predictability for finance

• Savings may disappear in high-demand markets

• No contractual protections beyond the discount

Hotel Bidding vs. Dynamic Discounts: The Data

Analysis of over 500 programs using ReadyBid shows:

• Hotel Bidding saved companies 12-18% on average when benchmarked properly.

• Dynamic Discounts performed well in stable or low-demand markets but spiked costs in peak seasons.

• Programs using hybrid models (bidding for key markets + dynamic discounts for low-volume cities) achieved the highest compliance and savings balance.

The Role of Automation

The real challenge isn’t choosing one model over the other-it’s managing them effectively. That’s where automation makes the difference.

• Corporate hotel RFP platforms streamline traditional bidding with verified contacts, templates, and bulk negotiations.

• Automated hotel RFP solutions enable dynamic comparisons, showing whether a fixed bid or discount provides better value in each market.

• Enterprise hotel RFP software supports hybrid strategies, allowing managers to mix bidding and discounts seamlessly.

Automation ensures travel managers don’t have to gamble-they can base sourcing decisions on real-time data.

Strategic Framework: When to Use EachUse Hotel Bidding When:

• You have high room night volume in a market.

• Predictability and budget stability are priorities.

• You want contracts covering amenities and cancellation terms.

Use Dynamic Discounts When:

• You have low-volume or secondary markets.

• You want flexibility and lighter administrative work.

• Your travelers benefit from fluctuating market rates.

Use a Hybrid Approach When:

• You need the stability of bidding in core markets (e.g., New York, London, Singapore).

• You want the flexibility of dynamic discounts in secondary cities.

• You need to balance finance predictability with traveler flexibility.

The Compliance Factor

Regardless of the model, compliance is key. Savings only matter if travelers actually book the negotiated hotels. That’s why:

• Travel Management Companies integrate sourcing directly into Concur and Sabre.

• A Business travel RFP solution provides real-time reporting to prove savings are realized.

• A Hotel RFP management system audits rates to ensure contracts are correctly loaded.

Without compliance and auditing, both models fail.

Lessons from Real Programs

Case Study 1: Hotel Bidding Success

A multinational financial firm bid out 300 hotels in 20 markets. Using ReadyBid, they achieved 92% hotel participation, negotiated 15% below market, and delivered $2M in savings.

Case Study 2: Dynamic Discount Pitfall

A tech startup relied exclusively on dynamic discounts. While rates looked competitive at first, during peak season in San Francisco they paid 25% above competitors with fixed contracts. Finance demanded a shift back to bidding for core markets.

Case Study 3: Hybrid Model Win

A pharma company adopted hybrid sourcing: bidding for 12 core markets, dynamic discounts for 40 secondary cities. With ReadyBid, they managed both in one platform, balancing savings, compliance, and workload.

Expert Reads on Hotel Bidding and Discounts

• 5 New Hotel Bidding Strategies That Maximize Savings in Corporate Travel Programs

• The Future of Hotel Bidding: How ReadyBid Simplifies Travel Procurement

• Why Hotel Sourcing Is More Complex Than Ever-and How to Simplify It

• Top 10 Hotel RFP Trends in 2025 Every Travel Manager Must Know

• Hotel RFP Tools That Work: Simplifying Corporate Hotel Sourcing from Bid to Booking

Final Thoughts

So, which model works best-hotel bidding or dynamic discounts? The truth is, it depends. For high-volume markets, bidding provides stability and leverage. For low-volume cities, dynamic discounts can offer flexibility. And for many organizations, the hybrid approach delivers the best of both worlds.

What matters most is having the right technology to manage it all. A modern hotel rfp platform like ReadyBid ensures you’re not guessing-you’re making data-driven decisions backed by automation, benchmarking, and compliance.

Book a Demo today and see how ReadyBid helps you balance hotel bidding and dynamic discounts for maximum savings.