Room for Savings: Optimizing Hotel Spend - Carlson

Hoteliers’ performance. A hotelier’s track
record is important, as performance varies
widely in terms of correct rate loading into
global distribution systems (GDSs) and the
application of LRA. When a new preferred
hotel is under consideration, the buyer’s
travel management company can share the
experience of other clients of the hotel.
Traveler behavior. The benefits of making
changes to the program should always be
considered in light of traveler behavior and
the ability to steer travelers toward other
hotels. Some “new” properties might already
be popular with travelers and represent a low
risk in terms of compliance, whereas others
might be a less certain choice. For changes to
bring the expected benefits, companies
should be prepared to implement measures
to improve compliance.
discussions during the first few months of
program implementation. The time taken
varies, but a general idea is shown in Figure
100. The most important point to note is that
requests for proposals must go out sufficiently
early for hoteliers and buyers to evaluate
proposals and carry out several rounds of
negotiations if necessary. At the same time,
negotiating too early can deprive companies
of valuable benchmark information.
This timeline is typical of companies that are
updating existing hotel programs. When a
program has to be designed from scratch or
completely overhauled, at least two years are
required to achieve average performance. For
best-in-class performance, a further two years
should be allowed with the support of hotel
sourcing and program optimization specialists.
Green criteria. Although hoteliers’ green
credentials can be hard to evaluate
objectively, companies are increasingly
interested in working with environmentally
friendly properties. When two properties
propose very similar conditions, green
benefits can make a difference, particularly
since travelers say environmental friendliness
is an important consideration.
Which timeframe and organization?
Effective negotiations require careful planning
and support from the right teams. The following
points are worth considering:
Plan in advance. Hotel contracts generally
run for a calendar year. Negotiations therefore
take place mainly toward the end of each year,
with an intense period of auditing and