3 Reasons to Focus on Local Negotiated Rate Contracts Now

Anna Ransom

3 Reasons to Focus on Local Negotiated Rate Contracts Now

Before the pandemic, travelers in the U.S. spent more than $232 billion on lodging, according to the U.S. Travel Association. That includes 463 million business trips, 38% of which were meetings and events related. How much your hotel sees of that travel will have a lot to do with location, but there are ways to entice companies into partnering with your property – the most effective being local negotiated rates (hotel LNR) or volume contracts.

These deals have benefits that go way beyond just putting heads in beds. Here are the top 3 reasons why you should prospect for new hotel LNR contracts now before most organizations begin budget season.

Before we dive in, be sure to visit our ultimate guide to grow events and group business for an all-encompassing rundown of events, sales and catering tips, data points and best practices.

Benefits of hotel LNR contracts:

1. “Guaranteed” Pick Up

Volume contracts not only allow your property to secure a minimum amount of business, but contain valuable information to help you forecast revenue, negotiate future contracts, and do so at the right rate. And of course, negotiating with local companies ensures that they’re working with you, not your competitors. It’s likely your competition is taking advantage of volume contracts and if your hotel isn’t, then you’re missing out on key business.

2. Predictability

Another reason why volume contracts are so important for hotels is that they’re more predictable than transient business. Having a set amount of LNR business planned for the entire calendar year and planning for any peak traveling months in advance is incredibly helpful to understand where you need to fill rooms and spend your marketing dollars. Knowing when popular times to travel are for specific contracts ahead of time will help your hotel drive demand and increase the value of your remaining rooms. And LNR business allows you more flexibility for pricing on group and transient business as well as planning for seasonality, adjusting your rates as needed.

3. Create Repeat Business

An undervalued benefit of LNR contracts is the opportunity to create repeat business. Some volume contract guests may have never stayed in your hotel before so it’s important to put your best foot forward for those new guests. And if your guests are repeat customers already, they’re likely to expect the same great service they experienced during their last stay. Either way, businesses are likely to renew a contract with your property year after year if they’re hearing positive feedback from their employees and guests during their stay.

Plus, ensuring guests are satisfied increases the chance they will continue to use or recommend your hotel for their own leisure travel. Groups attending events or large meetings are especially impactful, as you have the opportunity to create a positive experience and word of mouth at a grand scale.


Volume contracts should be considered critical for hotels because of the many different benefits they can provide. By focusing on satisfying volume contract guests, you create the opportunity to gain recurring business and generate brand loyalty for your hotel. Also, you can ensure you’re filling your availability on a more predictable basis throughout the year.


Amadeus and TravelClick, an Amadeus company, provide solutions to help increase your negotiated rate business, manage contracts with ease, and do so at competitive rates. Interested in learning how our sales and catering solutions and business intelligence solutions can help you manage your negotiated rate business? Schedule a demo.