Room for Savings: Optimizing Hotel Spend - Carlson

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Rate audits pay A rate audit conducted by CWT for one company revealed that it was paying more than the negotiated rate for 34 percent of its room nights at a preferred property even though it had negotiated a last-room availability agreement without black-out dates. Twenty-four percent of its room nights were more expensive than the negotiated rate despite having been booked using the correct GDS code. Out of these room nights, 37 percent were standard rooms while 63 percent were cases of travelers paying for deluxe rooms instead of standard negotiated rooms (Figure 122). Although it is possible that no standard rooms were available at the time of booking or that travelers asked for an upgrade, deluxe rooms may have squatted the GDS code intended for the negotiated rooms. Such findings should be investigated further with the hotelier to ensure errors are corrected.
Seven steps to optimize hotel spend > Track performance Figure 122: Audits showed that one company paid more than its negotiated rate for 34% of its room nights at a preferred property Results of LRA audit (Company N at a hotel in Paris) Hotels that provide LRA Room nights booked under the company’s code Room nights booked under another code Paid rate > negotiated rate Paid rate < negotiated rate Paid rate > negotiated rate Paid rate < negotiated rate 24% of room nights 55% of room nights 10% of room nights 11% of room nights 34% of room nights Breakdown of incorrect rates Reason Recommendation Room nights booked using correct GDS code but more expensive than the negotiated rate (24% of room nights) Standard rooms (37% of room nights) Deluxe rooms (63% of room nights) Rate or tax incorrectly loaded into GDS Traveler asked for a upgrade Hotel closed its standard rate Unavailability of standard rooms Other reasons (breaching the LRA contract) Discuss with the hotelier Continue LRA audits Enforce the travel policy and discuss results with the hotelier Extend the program to ensure maximum availability Continue LRA audits Sources: CWT Hotel Solutions Group, CWT Travel Management Institute Based on 14,962 room nights 129
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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
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Deciding between existing preferred
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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 126 and 127: To ensure that the agreed condition
Page 128 and 129: GDS rate squatting. Regular GDS aud
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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Room for Savings: Optimizing Hotel Spend - Carlson

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