The short answer
Hold a hotel program to four numbers: the Hold a hotel program to four numbers: the baseline rate, the negotiated rate, the compliance rate, and the realized saving measured on actual bookings. Effective savings rate, which is the negotiated discount multiplied by compliance, is the single figure that shows whether the program is performing.
Set the baseline before you negotiate
A saving needs something to be saved against. Before any agreement is signed, record the best rate the company could have booked on equivalent terms: same property, comparable dates and room type, same inclusions. Without that, every later number is an assertion.
Use twelve months of booking or expense data rather than a sample. The baseline is also the reference your procurement partner should be measured against, so it is worth agreeing in writing before the work begins.
The four numbers that matter
| Metric | What it tells you |
|---|---|
| Average daily rate against contracted rate | Whether the agreed rates are reaching travelers, or whether the gap is widening. |
| Compliance rate | The share of bookings made at contracted or policy-compliant rates. |
| Rate leakage | Compliance expressed in money: what the company paid above the rate it had already agreed. |
| Advance booking rate | How much volume is booked late, which typically costs more and carries worse terms. |
Effective savings rate
Effective savings rate is the negotiated discount multiplied by compliance. A 20% discount with 70% compliance delivers 14% effective savings. The same discount at 85% compliance delivers 17%. Most mid-market improvement comes from closing that gap rather than renegotiating the rate.
14%
effective savings from a 20% negotiated discount at 70% compliance.
17%
effective savings from the same negotiated discount at 85% compliance.
What a credible savings claim looks like
- A stated baseline, rather than a comparison with the public rate.
- The same properties, comparable dates and room types.
- Actual bookings or folios, not contracted rates.
- Any procurement fee netted off before the number is presented.
- A time window, so the claim can be checked again next year.
Zodiac client data shows an average 18–22% reduction in hotel spend in the 12 months after program launch. That figure combines rate improvements with higher use of the rates that were negotiated, which is why compliance sits inside it rather than beside it.
Where the saving lands
Hotel spend usually sits across several cost centers rather than one line, so the saving is only visible if reporting is broken down by property and market. Agree at the start how it will be reported, in a format your finance team can reconcile, and review it on the same cadence as the rest of the budget.
Questions worth asking
Get numbers your finance team can reconcile
Zodiac reports negotiated discount, compliance and realized saving against a baseline you agree before anything is signed.
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