Room for Savings: Optimizing Hotel Spend - Carlson

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To ensure that the agreed conditions are being met, companies should monitor hotelier performance throughout the year and identify any improvements that need to be made. In particular, it is worth focusing on three main areas: Rate loading in global distribution systems (GDSs). An initial CWT audit of five companies’ programs revealed that only 50 percent of negotiated rates were loaded correctly, while a further 10 percent were loaded incorrectly and were on average 15 percent higher. This result is common and such GDS rate loading errors can add approximately 5 percent to overall hotel program costs. When monitored and discussed with hoteliers, however, results can improve dramatically. In this analysis, regular rate audits gradually raised the percentage of correctly loaded rates to 77 percent. Ideally, an audit should take place at the beginning of the year to ensure the new terms and conditions are applied, and be repeated several times until most errors have been eliminated (Figures 118-119). Figure 118: In an initial audit of 5 companies’ programs, only 50% of negotiated rates were loaded correctly into the GDS Loaded rates (%) 100 GDS audits for 5 companies, 2008 (Companies X, AE, G, D & AK) 80 60 60 75 67 83 77 Rates loaded Rates loaded correctly 40 50 20 0 1st audit 2nd audit 3rd audit Sources: CWT Hotel Solutions Group, CWT Travel Management Institute
Seven steps to optimize hotel spend > Track performance Figure 119: An analysis of one company’s program shows poor GDS rate loading can add more than 5% to hotel program costs Source: CWT Travel Management Institute 125
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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
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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 124 and 125: Investigate the reasons for noncomp
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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