I got a phone call at 6:30am Mountain Time on Wednesday from our corporate travel department in Houston. The travel agent was very nice, but she had a question with my reservation next week in Houston. The conversation went something like this, numbers removed as a precaution:

A: Rate of hotel I’m staying at next week
B: Marriott’s overflow rate
C: Marriott’s standard rate for our company, only $10 more than $A.

“I see that you booked your trip with our corporate travel web site, and I noticed that you picked a different hotel than our corporate preferred hotel.”

“Yes. The hotel I chose has a rate of $A. I tried to choose the preferred Marriott, but it was giving me a rate of $B a night. We don’t get any money back for choosing the Marriott, so I’m saving the company $30/night this way,” I said.

“I see. That $B is our overflow rate. Halliburton reserves a bank of rooms for $C/night and pays that much for the bank whether the rooms are used or not. When that bank is full, the price goes up to $B.”

“Pardon me, but it is early here. Is Halliburton out $B when I don’t book the overflow room?” I asked.

“No.”

“Then how about I do this: Next time I go to Houston, I’ll check the Marriott rate on our travel site. If the price is $C, I’ll stay at the Marriott, and if the price is over that, then I’ll stay at the other hotel. Does this seem reasonable?”

“Yes, I think that will be fine.”

“Great. And thanks for calling and getting feedback from us frequent travelers. :) ”

I had always wondered what the incentive was for the more expensive hotels. The travel department is simply operating with a different set of incentives than my department. I imagine it’s this way for a lot of corporate travel.