Everything You Need to Know About Hotel Policy

Posted by NexTravel on 6/18/18 7:00 AM


One of the most important questions that we try to help our customers answer is, how do you create travel policies to drive growth, save money and keep employees happy?

To understand the best travel policies for growing companies, we looked at the data and spoke with some of the companies using NexTravel to set policies for overnight stays.

Spoiler alert, there’s no one-size-fits-all solution here. But there are plenty of insights and common trends that policymakers can use to create smart policies for their particular industries, travelers and trip types.

Before we dive in, you can find a primer on travel policy fundamentals here if you’re not already familiar.  On to to answering your hotel policy questions.


What are the best hotels for business travel?

Mid-range hotels seem to be the sweet spot for most companies. Among NexTravel customers, ranging from ten person startups to billion dollar companies, the most frequently booked hotel brands are Courtyard by Marriott, Holiday Inn, Hampton Inn and Marriott.

That doesn’t mean those are the only options you should consider. Boutique hotels are the most popular category overall, and short-term rentals are a very popular accommodation option as well, along with a range of premium and economy hotel bookings.


% Hotel Reservations by Hotel Chain or Type


The question we always suggest companies consider is, in what way will the place employees stay affect their work?

Start by covering the basics: clean rooms, fast wifi, nearby dining options and a good location.

We usually recommend booking hotels close to the job site, rather than booking the cheapest option if that would mean dealing with traffic and wasting time in transit.

Comfort is another key consideration, especially among road warriors who spend a disproportionate amount of time away from home and can easily get burned out.

Our CEO, Wen-Wen Lam experienced this herself earlier in her career, so she instituted a clear “avoid the cheapest option if it will take away from your happiness and ability to perform” policy here at NexTravel. She says that for her, it made a huge difference to be able to stay in the same comfortable hotel each time she was in the same city when she was traveling frequently for work earlier in her career.


Should we allow Airbnb stays?

The short answer here is “probably.”

Airbnb is an increasingly common business travel option, which appeals to travelers who may prefer the experience of staying in a home or apartment to staying in a hotel.

Hotels are still far more popular, but Airbnb has seen tremendous growth in the business travel category. Thanks to a big push by Airbnb to cater to business travelers, the category grew from 250 companies using Airbnb for business travel 2015 to 250,000 companies in 2017.

Must you include Airbnb’s in your travel policy? Of course not. But many employees and businesses do choose it over more traditional options.

If you want to go deeper on this one, this Airbnb report for corporate travel managers on Skift  goes into the details of Airbnb bookings for business.


What’s the deal with prepaid hotels?

Choosing to prepay for hotel bookings enables companies to centralize payments for one of the largest components of their travel spend. That means more rewards, less accounting overhead and more control over spending.

It also eliminates the need for travelers to front payments and submit expenses for accommodations. That can be particularly useful for candidates and consultants, or for any travelers who may not feel comfortable paying for business travel on their personal card.


How do you control costs without being overly strict?

This is one of the things we think about most. In the chart below, we’ve broken down the basic travel policy best practices for keeping costs under control while providing the flexibility and comfort travelers need to perform at their best.

Travel Policy Best Practices

  Employee Executive Candidates
Require Hotel Prepay Always Always Always
Require Payments on Corporate Card Always Always Always
Require Travel Approval For bookings 20% over lowest price option Never Always
Require Trip Purpose  Always Always n/a
Hide Flight Class Basic Economy, Business Class, First Class Basic Economy Basic Economy, Business Class, First Class

Here are the highlights for the hotels category:

  • Always require hotel prepay
  • Require approval for all candidate travel and any employee travel 20% over the lowest available price
  • Block hotels under 3-star ratings

As a rule of thumb, we always recommend that companies provide a relative price buffer (usually 20% above the lowest priced comparable option) rather than encouraging employees to book the cheapest hotel at all cost.

Ultimately, the cost of a bad travel experience tends to outweigh any difference in price.


What about recruiting?

The best hotel policy to use for recruiting depends partly on the level of the candidate. For high-value executive candidates, you may want to go a step above and hand-select a few hotel options that are sure to please, or block certain hotels, including all those below 4-stars.

For most other candidates, a relative price buffer, similar to your standard employee policy is a good idea.

Tip: Don’t forget about Airbnb as an option for candidates.

Another consideration is logistics. Many companies will limit the location range to within a few miles of the interview site, and specify the date(s) on which to book the hotel.

Payment is an issue that can be more complicated for candidates than employees. For that reason, we always recommend requiring hotel prepay, so you don’t have to deal with awkward money conversations, or chase down receipts for reimbursement.

Want to learn how other companies are using NexTravel to optimize their business travels? No problem, just schedule a demo.

Topics: Insider

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