Whew! You survived hotel negotiations. That means you and your travel management team deserve major kudos. But don’t take a break yet. Instead, take a few smart steps now to ensure your hotel program is a success in the year ahead.
“Now’s the time to make sure the negotiating work you’ve put in over the last five or six months will lead to strong benefits for your company and your travelers in 2015,” said Marwan Batrouni, senior director and practice area leader for business travel consulting firm Advito. He offers some key to-dos for travel managers exiting hotel negotiations:
1. Make sure you’re getting the savings you fought for
On average, 32% of negotiated rates are either incorrectly loaded or not loaded at all in the GDS before the first audit is run, according to Advito analysis.
- Conduct a GDS audit soon after the new rates take effect—around mid-January; around March; and again in June or July.
- Starting in February, conduct rate availability audits every other month to ensure the rates you negotiated are actually available to your business travelers.
- Also at the beginning of the year, start conducting rate parity audits every other month to ensure online consumer sites are not offering rates lower than what you negotiated.
- Audit your online booking tool to ensure rates are loaded properly and preferred hotels get prime positioning.
- If any audit uncovers a problem, address it immediately to ensure you end the year with the savings you expect.
2. Drive travelers to your preferred hotels
Traveler compliance can range from below 40% to over 80%, Advito research shows. Make sure your program is on the high end.
- Launch an awareness campaign at the beginning of the year so that travelers are informed about changes to preferred properties.
- Use an online hotel directory to provide travelers and executive assistants a way to easily locate preferred hotels and find out about their amenities and discounts.
- Use your online booking tool to boost preferred hotel bookings. For example, don’t allow a traveler to book a flight without also booking a hotel.
- Add reason codes to the booking process, so you’ll know why travelers are going elsewhere. If a customers’ office has moved, for example, your reason codes may alert you to the change. With that knowledge, you can negotiate a rate with a preferred supplier nearer the customer’s new location. Reason code data also is a valuable tool for future hotel negotiations.
3. Benchmark, then act
Regularly paying even a few dollars over the negotiated rate will greatly erode the savings you’ve worked so hard to achieve.
- Find out how your hotel rates compare to what your industry peers are paying. For example, is your pharmaceutical company paying more than other drug makers?
- Also, dig into how your rates compare to companies from other sectors whose hotel spend is on parwith yours.
- Consult your travel management company and enlist a consulting firm like Advito to guide you through the benchmarking process.
- If you discover you’re paying more, use those findings to conduct mid-year negotiations to achieve more savings.
4. Track the financial impact of your hotel program
Monitoring your progress is the only way to ensure you stay on top of good news—and bad.
- As soon as negotiations end, project your savings for the new year.
- Then track savings and compliance monthly or quarterly to understand whether you’re hitting targets.
- Audit your booked vs. negotiated rates, ensuring they are on target.
- If you’re not on target, figure out why and make adjustments—including going back to your preferred hotels for a reality check.
5. Communicate and collaborate with your groups/meetings team
It’s a first step toward integrated travel and meetings—and the significant savings integration brings.
- See if you can shift meetings spend to preferred hotels.
- Use your meetings data to enhance your leverage in future hotel negotiations and to get a better rate when sourcing sites for events.
Want to know more? Ask your account manager what BCD Travel and Advito can do to ensure your hotel program is creating value for your company and your travelers.
