Room for Savings: Optimizing Hotel Spend - Carlson

More documents

Recommendations

Info

There is, however, a risk associated with chainwide deals. In many cities where a preferred property is also available, travelers may be tempted to use the preferred chain and therefore dilute the volumes allocated to individual preferred properties. The hotel policy should therefore underline the procedure to follow when booking (i.e., choose preferred properties before preferred chains when both are available). travelers who might not accept fluctuating prices, difficulty in budgeting hotel costs, and a lack of clear-cut value brought by dynamic pricing (Figure 80). Flat-rate or dynamic pricing deal? Dynamic pricing agreements have long been a subject of debate among travel management professionals, mainly due to a lack of data to demonstrate the savings they can bring compared with negotiated flat rates. CWT therefore conducted in-depth case studies to discover just how well dynamic pricing deals can perform. Dynamic pricing agreements provide a fixed percentage discount off a hotel’s fluctuating best available rate (BAR). While companies commonly accept dynamic pricing in chain-wide deals, they tend to prefer flat rates whenever they have the requisite volume for a propertylevel agreement. According to the CWT survey, only 24 percent of companies have signed property-level deals based on dynamic pricing, and among those companies, 90 percent have done so with fewer than 10 hotels, as shown in Figure 79. Among companies that have signed dynamic pricing agreements, 39 percent say they did so only because the hotel(s) would not negotiate a flat rate. Companies that have refused dynamic pricing proposals cite several reasons, including the need to monitor prices, a fear that the room rate would increase, potential resistance from
Seven steps to optimize hotel spend > Negotiate effectively Figure 79: 24% of companies have at least one dynamic pricing agreement with a preferred property Do you have dynamic pricing agreements with any of your preferred properties? If so, how many agreements do you have? Companies (%) 100 Companies (%) 30 80 24 Yes 60 20 40 76 No 10 20 0 Source: CWT Travel Management Institute Based on a survey of travel managers (98 responses) 0 28 10 24 18 10 10 1 2 3 4-5 6-9 10+ Number of agreements Figure 80: Travel managers cite multiple reasons for refusing dynamic pricing deals Companies without a dynamic pricing agreement Did any hotels offer you a dynamic pricing agreement? % 100 % 80 Why did you refuse? (more than one answer possible) 80 39 Yes 60 60 40 61 No 0 20 We do not have the means to 0 monitor prices constantly Source: CWT Travel Management Institute Based on a survey of travel managers (71 responses) 40 20 68 61 61 57 57 The average room rate would have increased Travelers would not have liked it The value of dynamic pricing agreements is unclear Hotel spend would have been difficult to budget 11 Other 87
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 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 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 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
Page 120 and 121: Figure 112 shows how an OBT can be
Page 122 and 123: Require travelers to book their hot
Page 124 and 125: Investigate the reasons for noncomp
Page 126 and 127: To ensure that the agreed condition
Page 128 and 129: GDS rate squatting. Regular GDS aud
Page 130 and 131: Rate audits pay A rate audit conduc
Page 132 and 133: Tracking traveler compliance Compan
Page 134 and 135: SUMMARY Tracking performance: Compa
Page 136 and 137: Appendices Glossary The following i
Page 138:
For more information about how CWT
show all

Room for Savings: Optimizing Hotel Spend - Carlson

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?