Room for Savings: Optimizing Hotel Spend - Carlson

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Investigate the reasons for noncompliance. It is important for travel managers to find out (e.g., through traveler surveys) if travelers are booking hotels outside the program for legitimate reasons and investigate whether the program should be adjusted to better meet travelers’ needs. SUMMARY Improving traveler compliance: Although no hotel program can cover all traveler needs, there is plenty of room to improve compliance with preferred hotels and booking channels. Travel managers believe travelers’ personal preference is the main reason for non-compliance, while travelers cite mainly practical reasons, such as distance from the place of business, that indicate adjustments to the program may be required. Best practices for improving compliance include implementing policy mandates, keeping the policy and program up-to-date and easily accessible to travelers, communicating to a wide audience (both travelers and travel arrangers), configuring the online booking tool optimally, enforcing compliance at the time of booking, asking travelers to book hotels at the same time as transportation, empowering TMC counselors at the point of sale, ensuring follow-up with noncompliant travelers, and reviewing the hotel program regularly.
Seven steps to optimize hotel spend > Track performance 7. Track performance Generally speaking, performance tracking is underdeveloped in the business travel industry, which partly explains why hotelier performance and traveler compliance often fall below expectations. Best practices include GDS rate audits, LRA audits, compliance monitoring, and the use of key performance indicators. Tracking hotelier performance A well-negotiated program loses its value if hoteliers do not deliver what they promise, particularly in terms of room rates. Surveyed traveler managers are only too aware of this fact. While they rank “ability to meet commitments” as the most important feature of their relationship with hoteliers, they also say it is the feature with which they are least satisfied (Figure 117). Figure 117: Hoteliers’ effectiveness in meeting commitments ranks low in terms of travel manager satisfaction Hotelier performance rated by travel managers 2.5 Satisfaction 2.0 Closeness of working relationship Expertise/ knowledge Effectiveness of negotiations Quality of reporting Effectiveness at delivering the agreed level of service Responsiveness and flexibility Ability to meet commitments Importance Unimportant: Nice to have: Important: Essential : Satisfaction Very dissatisfied: Dissatisfied: Satisfied: Very satisfied: 0 1 2 3 0 1 2 3 1.5 2.0 2.5 3.0 Importance Lowest satisfaction scores Source: CWT Travel Management Institute Based on a survey of travel managers (99 responses) 123
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Room for Savings: Optimizing Hotel
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Contents Introduction Overview ....
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Research objectives This CWT resear
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Figure 1: Breakdown of surveyed com
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Key findings in brief The research
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changes. In addition to providing t
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A complex market The complexity of
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A lack of global standards to defin
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Complex pricing Hoteliers use diffe
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Figure 10: Rates remain fairly cons
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Figure 12: Most corporate hotel boo
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Data on hotel spend is however, not
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How to calculate your company’s t
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2. Twenty-one percent savings throu
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Many organizations have yet to opti
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GDS auditing It is important to ens
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1. Consolidate data Travel managers
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Figure 27: Combined TMC and credit
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Figure 28: Recommended data fields
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Hotel category: not the most import
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“No-frills” booking When it com
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In fact, travelers often draw on th
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A number of differences between the
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SUMMARY Understanding traveler need
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2. Ask travelers to use serviced ap
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Figure 41: Recommended rules for bo
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Figure 43: Rates are on average 18-
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Figure 46: In a rate benchmarking e
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5. Mandate booking at least two wee
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6. Address extra charges Travelers
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SUMMARY An optimal hotel policy cov
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4. Optimize the preferred hotel pro
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Identifying properties and location
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Considering local market conditions
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Figure 59: One company could save 6
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Figure 61(continued): The share of
Page 74 and 75: Figure 63: Hotel stays of at least
Page 76 and 77: Deciding between existing preferred
Page 78 and 79: Figure 69: Companies that retain at
Page 80 and 81: SUMMARY Key points for optimizing a
Page 82 and 83: 5. Negotiate effectively Negotiatio
Page 84 and 85: Chain-wide agreements, as the name
Page 86 and 87: Chain-wide deals tend to offer smal
Page 88 and 89: There is, however, a risk associate
Page 90 and 91: Despite this reticence, 40 percent
Page 92 and 93: Figure 83: Another company’s ARR
Page 94 and 95: Last-room availability A last-room
Page 96 and 97: LRA is common in corporate contract
Page 98 and 99: Benchmark rates. Companies commonly
Page 100 and 101: Companies can consolidate volumes i
Page 102 and 103: Leverage city caps. Experience sugg
Page 104 and 105: Consider renegotiating flat rates d
Page 106 and 107: Buyers should use the full range of
Page 108 and 109: Hoteliers’ performance. A hotelie
Page 110 and 111: Ensure your travel management team
Page 112 and 113: 6. Improve traveler compliance The
Page 114 and 115: Understanding why travelers book ou
Page 116 and 117: The survey also indicates that trav
Page 118 and 119: Explain the stakes. Price-conscious
Page 120 and 121: Figure 112 shows how an OBT can be
Page 122 and 123: Require travelers to book their hot
Page 126 and 127: To ensure that the agreed condition
Page 128 and 129: GDS rate squatting. Regular GDS aud
Page 130 and 131: Rate audits pay A rate audit conduc
Page 132 and 133: Tracking traveler compliance Compan
Page 134 and 135: SUMMARY Tracking performance: Compa
Page 136 and 137: Appendices Glossary The following i
Page 138: For more information about how CWT
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