With hotel rates climbing faster than air fares, companies may need to re-think the way travelers organize their journeys to maximize total trip savings.

It is no coincidence that the first section of the BCD Travel 2008 Industry Forecast is not about air travel. Instead, pride of place goes to hotels because, for the fourth year running, the cost of accommodation is expected to grow faster than for any other sector in corporate travel. While published air fares are expected to rise 2 percent to 4 percent and negotiated corporate fares by less than 2 percent, the forecast tips hotel rates to rise 6 percent to 9 percent, with increases hitting double-digits in the most popular cities.

“We see the proportion of hotel to air spend among our corporate clients increasing as a trend,� says Jason Harris, senior director of global hotel relations for BCD Travel. “If travelers are staying overnight on a short-haul trip, the price of the hotel is outstripping that of the air ticket, which rarely happened five years ago.�

Travel buyers and their travelers may need to re-think their strategy to deal with the new reality. Here are some tips on how to readjust for journeys where the hotel rate is likely to exceed the air fare:

1. Book your hotel first
Most travelers follow the traditional pattern of booking their flight first, then considering their accommodation options, often several days or even weeks later. Perhaps, as suggested in the BCD Travel Industry Forecast, it is time to reverse the order. As the illustration of a trip to New York shows (see bottom of this page), they may end up with a cheaper total price if they start by figuring out the night on which hotel rates are cheapest. Choosing the air booking first instead can limit the hotel options (if some properties are full that night, for instance) or push up the price.

If the trip involves booking a meeting room at the hotel, the difference in price according to day of arrival is likely to be even greater.

2. Book your hotel early
Even if travelers book their flights well in advance, they often leave their hotel reservations until a couple of days before departure. Since hotels are increasingly adopting the model of raising their rates as the date of the stay approaches – known as BAR (Best Available Rate) pricing – this is creating unnecessary cost.

“Many travelers have not caught on yet that the earlier you book, the better the rate,� says Harris. “One of the fastest-growing rate types we are selling is advance purchase. It carries more stringent conditions, such as having to pay in advance, but if you cancel one in ten bookings you make at these rates, that is still outweighed by the savings.�

3. Tighten policy
The BCD Travel 2007 Client Benchmark Survey showed that average compliance with policy for hotel bookings is 60 percent to 70 percent, compared with 70 percent to 80 percent for air. Only 12 percent of businesses mandate their hotel policy and only 46 percent require reservations to be made through the preferred agency.

Ensuring travelers book preferred hotels through the preferred channel drives better compliance, better data and ultimately better rates.

4. Change your processes
Think creatively about changing processes to change behavior. One example for users of online booking tools could be to introduce destination templates which encourage booking of the flight and hotel at the same time.

5. Communicate
Travel buyers understand the hotel often costs more than the flight, but their travelers may not. Communicate to them the need to understand the total cost of their trip before they book, not just the flight. Show them real examples, like the New York illustration, to demonstrate the savings they could make.

6. Change the night of the stay
The most popular nights of the week in business hotels are Tuesday-Thursday. If travelers can be persuaded to stay on another night, they are likely to benefit from much lower rates. “This is not a realistic option most of the time, but it might be appropriate for 5 percent to 10 percent of trips,� says Harris. With travelers increasingly combining business with leisure (i.e., a weekend city break at their business destination), it may be possible to schedule a trip which suits both employer and employee.

7. Don’t stay overnight
BCD Travel is seeing an increase in day trips to avoid accommodation costs, but at the same time worsening flight delays and longer check-in times are making it harder to travel out and back on the same day. The right balance needs to be found.

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