Am I being overcharged? Event Planner V/S Online Booking Portals

The question I receive most frequently and have replied to for almost every client, prospective client and even the not really a client category.

Yesterday a client pinged me,

Client: Booking.com rate is cheaper than the rate you have negotiated for 10 rooms

Me: ( In my Head )- “ You must be Kidding me”, this is the first thing I had explained to you!

There goes the whole saga…Yet Again!!

I will try and explain as briefly as possible the reason for such instances.

Hotels & Categories:

1. 5 Star Luxury
2. 5 Star as per Categorization
3. 4 Star/ 3 Star
4. Budget
5. Boutique
6. Service Apartments and Air Bnb's

Who decides what price the Hotel will sell at?

Each Hotel Category stated above, on receiving their categorization submits rate list to the FHRAI, which happen to be the Rack Rates. For a lot of seasonal destinations the rack rates differ for season and off season. These Rack rates are also the capping that the hotels cannot sell above the rack rate. Season Rates will always be higher than the off season rates. In Some instance can be 100% Higher than the off Season rates, completely dampening on the demand and supply of the City.

Why does Booking.com/Expedia/ Make My Trip/ Yatra.com/ Goibibo offer a lower  price?

Each Hotel has certain Travel Agencies or Tour Operators who support them through the year, Especially Chain Hotels sign Contracts with these sub sellers at the beginning of the Financial Year at a certain privileged Price, now it is the Sub Sellers Discretion how he sells it. One Trend that has been seen is the Dynamic Pricing (Example the Airline pricing), where the sub seller under a promotion might be selling at a lower price than the Contracted Price to lure customers, but you are never able to book more than 2 or 3 rooms at that promotional price, so when it comes to a group booking you will never be able to book your 10 rooms or 100 rooms at the price you see online.

Hotels in India also have strict policies now with travel agencies where the travel agency can sell the contracted prices to either a Tourist ( In professional Terms FIT - Foreign Individual traveler) and not a group. This is the same as airline pricing. These agencies will also have group rates limited to 15 rooms and not valid for any social events.

Why are Weddings and Social Event rates higher? Isn’t bulk business expected to be cheaper?

Well, technically yes they should be cheaper but Every Hotel has a Revenue Model and an ARR (Average Room Rate) to achieve. Over Years, hotels have realized the need of Weddings as a separate Segment and most of the hotels have hired a Wedding Coordinator. (NOT A WEDDING PLANNER)
Hence when you enquire for a wedding, the rates will be differ from the rates for a conference and that for a single room.

Normally a family on a vacation booking a room or two will need a Lavish breakfast, and order their Al a Carte Preferences for lunches and Dinner. This is called a continental plan - Bed and Breakfast.

A conference is business focussed and their breakfast and Lunches will be Working Meals as they are in and out of Conference, pretty much limited to a Menu like this for Lunch and Dinner

Sample Conference Lunch Menu: 1 Dal + 1 Paneer + 1 Vegetable + 1 Chicken + 1 Fish/ Mutton + Roti Rice + Salads + Achar + Papad Chutney and 2/3 Desserts.

Similar Menu for Dinner with may be some live stations or some starters added (in most cases 1 veg + 1 non veg).

The above is nowhere close to a Wedding Menu, in Indian Culture and in Destination Weddings food plays an important role, when you negotiate a deal with the Hotel, keep in mind the menu above for comparison. Similarly feel free to ask for their breakfast menu.

But still, are they making money?

When quoting a Wedding rate, they also average out the fact that if the entire hotel has been taken up by one client, they are doing a fixed sale, no extras will be incurred and the revenue is smartly divided in different segment, which justifies the role of a Revenue Manager in Every Hotel.

How to Ensure you get the best deal?

- Peak Wedding dates will not get you the best deals, be flexible with wedding dates and always go searching for a wedding venue with 2 to 3 different sets of dates in mind.
- Off-season Destination Weddings can be half the price of season weddings in terms of seasonal destinations.
- A lot of clients now do the Wedding Registry on the auspicious date and are open to the wedding celebrations dates and months to get better deals.
- If you book 10-12 Months prior, you definitely  will strike a better deal.

Hope the blog answers all your questions related to booking a Hotel for a destination wedding.
Please feel free to write to me at www.gkww.co.in for further queries.

Signing Off
Garema Kumar