Room for Savings: Optimizing Hotel Spend - Carlson

Seven steps to optimize hotel spend > Optimize the preferred hotel program
Figure 67: Two companies maintained on average 58-77% of their preferred hotels
year over year
Company H
Average program stability
(preferred hotels retained year over year): 58%
Company B
Average program stability: 77%
525
525
620
(+18%)
311
309
700
(+13%)
299
49
144
208
359
359
390
(+9%)
96
294
360
(-8%)
70
6
67
217
2006 2007 2008
2006 2007 2008
Preferred hotels 2006
Source: CWT Travel Management Institute
New hotels 2007
Hotels added to or removed
from the program in 2006
New hotels 2008
Before switching preferred hotels, travel
managers should consider their ability to steer
travelers toward new properties. Fifty-two
percent of travel managers say travelers need at
least three months to adjust to changes, and
one case study shows that travelers continued
to book a particular hotel one year after it had
been removed from the program (Figure 68).
Companies should implement measures to
improve compliance if necessary. More
importantly, companies should consider the
long-term impact of any changes, as strong
relationships with hoteliers can help them
negotiate better rates.
Figure 68: Travelers at one company
continued to book a significant number of
rooms at a hotel one year after it was
removed from the program and
compromised savings
Figure 69 suggests companies that retain a
large proportion of preferred hotels from year
to year (at least 80 percent) tend to be more
effective at limiting rate increases.
Source: CWT Travel Management Institute
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