Room for Savings: Optimizing Hotel Spend - Carlson

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Figure 59: One company could save 6% of its hotel spend by switching to lower-price hotels in the same category or one category below Breakdown of room nights before and after category switch 100 80 Before After Room nights (%) 60 40 63 72 20 0 22 14 20 7 1 1 Deluxe First Standard Economy Sources: CWT Hotel Solutions Group, CWT Travel Management Institute 6% savings on total hotel spend of US$47M Figure 60: Companies used a smaller proportion of deluxe and first-class hotels in 2008 % 60 Share of deluxe and first-class hotels booked by 7 global companies Q1 2008 vs. Q4 2008 Q1 2008 Q4 2008 40 20 0 52 50 54 42 40 39 38 31 31 34 16 11 11 7 I C AC M T N H Source: CWT Travel Management Institute Based on transaction data Company
Seven steps to optimize hotel spend > Optimize the preferred hotel program To select the appropriate categories, CWT offers the following advice: Benchmark the use of different hotel categories among peers (i.e., companies with a similar profile and in the same industry) with help from the travel management company. CWT client data shows notable differences between sectors and even between different companies within the same sectors (Figure 61). Figure 61: The share of hotel categories used varies between sectors and companies in the same sectors Total room nights by hotel category (2008) 40% 25% 18% 17% 12% 7% 22% 52% 65% 69% 61% 70% 81% 60% Banking & finance 8% 9% 13% 22% 17% 11% 18% 0% 1% 0% 0% 1% 1% 0% Petroleum, energy & mining Pharmaceutical Consumer goods Telecommunications Automotive Average Economy Standard First Deluxe Source: CWT Travel Management Institute Based on transaction data (3,036,799 room nights) 69
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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
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 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 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
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
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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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