Room for Savings: Optimizing Hotel Spend - Carlson

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Figure 28: Recommended data fields for analyzing hotel spend per transaction Hotel Data field Property name Hotel identification code Chain identification code Location (country/city) Negotiated rate/room type Items included in negotiated rate (e.g. breakfast and Internet access) Assessment Spend per hotel & preferred hotel compliance As above Spend per chain Spend per destination Application of correct negotiated rate & year-over-year rate changes As above Booking Stay Payment Booking date GDS rate code used Booking channel Check-in/check-out dates Number of room nights and travelers Room type Payment type (corporate credit card/ personal credit card/direct billing) Advance booking performance Correct rate loading Use of preferred booking channels Application of negotiated rates, seasonal rates & black-out dates Correct negotiated rate & stay pattern Traveler compliance & correct negotiated rate for room type Traveler compliance to correct payment method Cost Total cost including all expenses (ideally including e-folio breakdown) Total hotel spend & breakdown of spend on amenities Source: CWT Travel Management Institute SUMMARY Travel managers can consolidate data most effectively by: Distinguishing between transient spend and meetings and events volumes Focusing on TMC and corporate credit card reports to cover the majority of spend Using selected hotelier reports to obtain further data Asking hotels for granular e-folio data Working with a partner to process data
Seven steps to optimize hotel spend > Understand traveler needs and behavior 2. Understand traveler needs and behavior When designing a preferred hotel program, travel managers need to understand why and how travelers choose where to stay and which hotels best suit their needs. Some of the CWT survey findings may come as a surprise. For example, travelers are not necessarily happier with higher-category hotels. On the other hand, they consider a convenient location to be critical. Furthermore, CWT has identified four types of corporate hotel guests based on their varying needs for comfort and practicality. By better understanding traveler priorities and choices, companies can optimize savings without compromising traveler satisfaction and productivity. Location ranks far above all other criteria, including hotel category Proximity to business locations is by far the most important hotel criterion for travelers according to the CWT survey. Hotel category and quality of service come next and are considered “very important,” as shown in Figure 29. Similarly, security is high on the list, underlining the need for companies to mitigate travel-related risks for their employees. Interestingly, environmental friendliness is considered more important than a number of items that impact traveler comfort such as the hotel’s style and the availability of a restaurant or sports and leisure facilities. Moreover, many travel managers may be surprised to learn travelers rank hotel loyalty programs very low in importance globally, although North American travelers give them a slightly higher ranking. Proximity to places of personal interest are also ranked simply as “nice to have.” Business concerns clearly come first. Figure 29: Proximity to business locations ranks highest among hotel features for travelers Travelers’ ranking of hotel features by importance Importance Proximity to business locations Hotel category Quality of service Security Internet access Quality of food Environmental friendliness Atmosphere/style Availability of restaurant/room service Proximity to places of personal interest Leisure/sports facilities Hotel loyalty program Availability of meeting rooms Essential Important Nice to have Unimportant Unimportant Nice to have Important Essential Source: CWT Travel Management Institute Based on a survey of travelers (4,564 responses) 37
Page 1: Room for Savings: Optimizing Hotel
Page 4 and 5: Contents Introduction Overview ....
Page 6 and 7: Research objectives This CWT resear
Page 8 and 9: Figure 1: Breakdown of surveyed com
Page 10 and 11: Key findings in brief The research
Page 12 and 13: changes. In addition to providing t
Page 14 and 15: A complex market The complexity of
Page 16 and 17: A lack of global standards to defin
Page 18 and 19: Complex pricing Hoteliers use diffe
Page 20 and 21: Figure 10: Rates remain fairly cons
Page 22 and 23: Figure 12: Most corporate hotel boo
Page 24 and 25: Data on hotel spend is however, not
Page 26 and 27: How to calculate your company’s t
Page 28 and 29: 2. Twenty-one percent savings throu
Page 30 and 31: Many organizations have yet to opti
Page 32 and 33: GDS auditing It is important to ens
Page 34 and 35: 1. Consolidate data Travel managers
Page 36 and 37: Figure 27: Combined TMC and credit
Page 40 and 41: Hotel category: not the most import
Page 42 and 43: “No-frills” booking When it com
Page 44 and 45: In fact, travelers often draw on th
Page 46 and 47: A number of differences between the
Page 48 and 49: SUMMARY Understanding traveler need
Page 50 and 51: 2. Ask travelers to use serviced ap
Page 52 and 53: Figure 41: Recommended rules for bo
Page 54 and 55: Figure 43: Rates are on average 18-
Page 56 and 57: Figure 46: In a rate benchmarking e
Page 58 and 59: 5. Mandate booking at least two wee
Page 60 and 61: 6. Address extra charges Travelers
Page 62 and 63: SUMMARY An optimal hotel policy cov
Page 64 and 65: 4. Optimize the preferred hotel pro
Page 66 and 67: Identifying properties and location
Page 68 and 69: Considering local market conditions
Page 70 and 71: Figure 59: One company could save 6
Page 72 and 73: 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
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Despite this reticence, 40 percent
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Figure 83: Another company’s ARR
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Last-room availability A last-room
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LRA is common in corporate contract
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Benchmark rates. Companies commonly
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Companies can consolidate volumes i
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Leverage city caps. Experience sugg
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Consider renegotiating flat rates d
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Buyers should use the full range of
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Hoteliers’ performance. A hotelie
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Ensure your travel management team
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6. Improve traveler compliance The
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Understanding why travelers book ou
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The survey also indicates that trav
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Explain the stakes. Price-conscious
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Figure 112 shows how an OBT can be
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Require travelers to book their hot
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Investigate the reasons for noncomp
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To ensure that the agreed condition
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GDS rate squatting. Regular GDS aud
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Rate audits pay A rate audit conduc
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Tracking traveler compliance Compan
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SUMMARY Tracking performance: Compa
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Appendices Glossary The following i
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For more information about how CWT
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