Introduction
Every corporate travel manager wants the same outcome from hotel sourcing: competitive rates, consistent amenities, and compliant contracts. But achieving those goals is far easier said than done. Without accurate market data, how do you know whether the discounts hotels offer are actually competitive? The answer lies in benchmarking.
Benchmarking is the process of comparing proposed hotel rates and terms against reliable market data. It ensures that negotiations aren’t based on guesswork, but on transparent insights. Today’s leading hotel RFP tools like ReadyBid integrate benchmarking directly into the negotiation process, making it an essential feature for corporate buyers. In fact, many travel managers now consider benchmarking the most important function of the best hotel RFP solutions-because without it, there’s no way to validate whether you’re really getting a good deal.
What Is Benchmarking in Hotel RFPs?
In hotel sourcing, benchmarking means evaluating the rates and amenities offered by hotels against:
Industry averages in the same market.
Competitor data from other corporate programs.
Historical rates from the company’s prior contracts.
The purpose is simple: to confirm that the negotiated rates are both competitive and aligned with broader market conditions.
For example, if a hotel proposes a corporate rate of $180 per night in Denver, benchmarking helps determine whether similar companies in the same market are paying $150 or $200. This data-driven insight empowers travel managers to push back when offers are inflated.
Why Benchmarking Is Essential in Negotiations1. Prevents Overpaying
Without benchmarking, companies often accept rates that are 10-20% higher than market averages. Benchmarking ensures you know when to challenge a hotel’s proposal.
2. Strengthens Negotiation Power
Armed with benchmarking data, travel managers can present hard evidence during negotiations, shifting leverage back to the buyer.
3. Ensures Fairness Across Markets
Benchmarking ensures consistency across global programs, avoiding situations where some markets are overpriced while others are competitive.
4. Drives Supplier Accountability
Hotels know they’re being measured against market data, incentivizing them to offer their most competitive deals.
5. Proves ROI to Stakeholders
Finance and procurement teams want proof that sourcing delivers savings. Benchmarking provides quantifiable data to demonstrate value.
Challenges of Benchmarking Without Tools
Manually benchmarking rates is nearly impossible. Travel managers face:
Data Gaps - Reliable competitor and market data isn’t publicly available.
Time Burden - Collecting and analyzing rates across multiple markets takes months.
Static Comparisons - By the time spreadsheets are built, the data is already outdated.
This is why a modern hotel RFP solution with integrated benchmarking is critical.
How Hotel RFP Tools Enable Benchmarking
Platforms like ReadyBid integrate benchmarking throughout the sourcing cycle:
Pre-RFP Benchmarking - Compare historical program rates against market averages before launching the RFP.
Live Negotiations - Access real-time benchmarking during negotiations to push for better deals.
Final Agreements - Confirm negotiated rates align with industry benchmarks before contracts are signed.
Post-Audit Reporting - Track whether rates remain competitive after launch with year-over-year comparisons.
ReadyBid even includes dynamic rate analysis to evaluate static vs. dynamic pricing models, supporting smarter program decisions.
Real-World Example: Negotiated Savings
Consider ReadyBid’s Negotiated Savings Report. By benchmarking proposed rates against market averages, travel managers can calculate actual savings achieved through negotiation. For example:
Initial average proposed rate: $156.93
Final negotiated average rate: $127.50
Savings: $24.50 per night
When applied across hundreds of room nights, benchmarking can translate into six- or seven-figure annual savings.
How Benchmarking Supports Corporate Travel Management
Benchmarking is more than a negotiation tactic-it’s a strategic pillar of corporate travel management. It helps organizations:
Align with Budget Goals - Ensures programs meet financial targets.
Improve Traveler Experience - Ensures hotels with the best value (not just lowest rates) are selected.
Support Compliance - Demonstrates that contracted rates are fair, reducing resistance from travelers.
Optimize Globally - Standardizes rate expectations across all regions.
Best Practices for Using Benchmarking
Leverage Technology - Use a hotel procurement tool with built-in benchmarking instead of spreadsheets.
Compare Apples to Apples - Always factor in amenities, commissions, and cancellation terms-not just nightly rates.
Use Continuous Sourcing - Don’t limit benchmarking to once a year; monitor competitiveness quarterly.
Balance Traveler Needs - Sometimes the lowest rate isn’t the best option if it compromises traveler satisfaction.
Audit Regularly - Verify that negotiated rates remain competitive after loading into GDS and OBT systems.
Why ReadyBid Leads in Benchmarking
Among the top hotel RFP tools, ReadyBid stands out because it offers:
Real-Time Benchmarks - Compare proposals against live market data.
Year-Over-Year Comparisons - Quickly see whether rates are improving or declining.
Unlimited Negotiation Rounds - Continue counteroffers until benchmarking confirms competitiveness.
Automated Auditing - Ensure rates are correctly loaded into GDS systems to match benchmarks.
Custom Reporting - Generate executive summaries that prove ROI to stakeholders.
This makes benchmarking not just a feature, but a core part of the sourcing strategy.
Additional Learning Resources
For more on benchmarking in hotel sourcing:
Conclusion
So, why is benchmarking essential during hotel RFP negotiations? Because it transforms the process from guesswork into strategy. Without benchmarking, companies risk overpaying, losing leverage, and failing to prove ROI. With benchmarking, travel managers can negotiate smarter, deliver consistent savings, and ensure fair treatment across all markets.
Platforms like ReadyBid-considered one of the best hotel RFP solutions-embed benchmarking directly into the sourcing lifecycle, ensuring travel managers always negotiate from a position of strength.
Book a Demo Today and see how ReadyBid’s benchmarking capabilities can elevate your next hotel RFP cycle.