Room for Savings: Optimizing Hotel Spend - Carlson

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6. Address extra charges Travelers need clear guidelines on which charges are reimbursable when they are not included in the room rate. For example, expenses such as laundry may be authorized only for longer stays. Figure 50 provides examples of items often mentioned in travel policies. Figure 50: Sample policy regarding extra hotel charges Reimbursable expenses Breakfast Business phone calls (although the use of a corporate calling card is preferred) Laundry (within reason for stays exceeding 5 nights) Internet access for business purposes Use of fitness center Non-reimbursable expenses Laundry for stays under 5 nights In-room movies Recreational activities Spa treatments Room-service breakfast (if breakfast is included in the room rate) Alcoholic beverages from the mini-bar Source: CWT Travel Management Institute 7. Mandate payment by corporate credit card As seen earlier (Pages 33-34), corporate credit card data can be invaluable for companies to accurately evaluate their hotel spend and help travelers better manage their expenses. At the same time, surveyed travel managers recognize that some travelers would prefer to have their hotel bill sent directly to their company or TMC. While direct billing can be particularly useful for travelers who do not have their own corporate card, it tends to be an expensive solution for companies due to administrative costs, TMC processing costs and lost savings. Surveyed companies believe travelers are less costconscious when they do not settle their hotel bills themselves and are more likely to incur penalty fees through last-minute cancellations.
Seven steps to optimize hotel spend > Design an effective hotel policy Figure 51 sums up the pros and cons of different payment methods. Figure 51: Corporate credit cards help companies manage hotel spend: pros and cons of different payment methods Payment method Corporate credit card Pros Cons CWT rating Facilitates hotel spend tracking, especially if a single global credit card program is in place Enables e-folio reporting (when available) Provides services for travelers (e.g., insurance, 60-day payment and a high spend limit) Can provide incentives for companies Data is fed directly into expense management systems Data consolidation can be challenging when more than one corporate credit card is used Personal credit card Direct billing No need to negotiate and roll-out a corporate card program Useful for occasional travelers who do not have credit cards Easy for travelers (no expense report, quick check-out, and no need for travelers to provide personal credit card information as a booking guarantee) TMC can ensure correct rate is applied when checking the invoice Data consolidation is impossible Travelers may be reluctant to provide personal credit card information as a booking guarantee Travelers are less cost-conscious with regard to last-minute cancellations or no-shows Direct billing is accepted by fewer and fewer hotels and is a costly, manual process Data reconciliation can be challenging (not enough information on the invoice to identify the traveler/cost center to expense) Source: CWT Travel Management Institute 59
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Room for Savings: Optimizing Hotel
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Contents Introduction Overview ....
Page 6 and 7:
Research objectives This CWT resear
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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 38 and 39: Figure 28: Recommended data fields
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 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
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
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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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