Room for Savings: Optimizing Hotel Spend - Carlson

Seven steps to optimize hotel spend > Optimize the preferred hotel program
To maximize the benefits of a preferred hotel
program, companies need to cover as many of
their major business destinations as possible and
concentrate spend on the smallest number of
properties at each, while ensuring travelers’
needs are met in terms of suitable locations,
available rooms and amenities. This exercise is
far from easy but can be facilitated by six main
actions: forecasting hotel spend, identifying
properties and locations that represent at least
US$10,000 in spend, considering local market
conditions, selecting appropriate hotel categories,
deciding between existing preferred hotels and
competitors, and considering primary and
secondary preferred properties.
Forecasting hotel spend
The first step in building or reviewing a program
is to identify locations travelers frequent most
and to forecast hotel spend in each. Here it is
important to think in terms of districts rather
than just cities, given that travelers want to stay
at a hotel close to their place of business. Figures
on existing spend serve as a basis but should be
adjusted to account for anticipated changes in
travel patterns. Such forecasts can be challenging
when a high proportion of overnight trips (57
percent on average) are to locations outside
companies’ own sites, as shown in Figure 54.
Figure 54: On average 57% of overnight trips are to locations outside of companies’ own sites
Source: CWT Travel Management Institute
Based on a survey of travelers (5,016 responses)
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