Early this year, a hotel called me to let me know that hotel space was booking up fast and that if my client wanted to have its event at the same time as last year, we should book soon. After some consultation, a decision was made to postpone the event until September. Even with over 6 months notice, all dates weren't available.
This year more than ever it is important for clients to book early to ensure that their preferred event venues, dates and airline space is available. It is particularly important to book early if budgets are tight and companies want to stretch their budget.
Here is a quick hotel rate and airfare fare primer.
There are 2 main approaches to hotel pricing. The first is based on seasons, the second is demand pricing.
- Seasonal rates:
hotel rates in destinations with seasonal pricing tend to fluctuate between high, swing (or shoulder) and low (or off) season. Destinations that use the seasonal pricing model include the Caribbean and Mexico. The lowest rates tend to be during times of the year when demand may be lower due to the need changes in weather conditions. For example, in Canada, rates will be higher during the summer and lower in the winter. In the Caribbean, rates will be higher during the months in which North America is experiencing summer and lower in the summer months when temperatures soar.
- Demand pricing:
Pricing in destinations that use demand pricing fluctuates based on supply and demand. In the same months, there can be pricing at a variety of levels. For example, in Dubai, if there is a Russian or Germany holiday during the month, pricing will be higher and the availability of hotel space lower. Between early May and Mid-October when temperatures soar to the point of being uncomfortable, hotel rates will be lower.
Airline fares also fluctuate based on demand. In addition to the usual First Class, Business Class and Economy fares, some airlines also offer a premium economy class in which seats have more leg room and there are more amenities. Some airlines offer a limited number of discounted business class seats. There are also variations in economy fares. For example, a certain number of seats will be deeply discounted. As seats at that category are sold out, pricing at higher economy fare levels kicks in.
Companies that make last-minute decisions will find pricing at the highest fare categories. Airlines will always give some attrition for group bookings. Attrition can be as high as 20%. It is best to reserve more seats than the group estimates it will require to ensure that favorable pricing will be available for the entire group.
The main take-away is to advise clients that, if they want to save money, it is important to contact hotels and airlines well in advance of preferred dates. Be flexible and keep a number of options opens before locking in final dates.
Photo Credit: moreska