bring­ing it all TO­GETHER

The ways in which cor­po­rates are con­sol­i­dat­ing and man­ag­ing their ho­tel spend is di­ver­si­fy­ing, writes Gil­lian Up­ton, who looks at how best to op­ti­mise your ac­com­mo­da­tion out­lay

The Business Travel Magazine - - Hotels -

Con­tent is king in the world of ac­com­mo­da­tion and travel man­agers to­day are able to find a B&B in Lan­cashire as eas­ily as they can a four-star ho­tel in Lon­don.

TMCS are work­ing hard to not only pull in con­tent from the GDSS but also a raft of ag­gre­ga­tors and di­rect chan­nels to of­fer as wide a choice as pos­si­ble, from the mega ho­tel chains to the in­de­pen­dents and more.

More­over, tech­nol­ogy has en­abled greater vis­i­bil­ity of that con­tent, so a trav­eller or travel man­ager can view the rooms vir­tu­ally be­fore mak­ing a de­ci­sion and also check out any feed­back on a par­tic­u­lar prop­erty.

Mark Be­van, Head of Strate­gic Re­la­tion­ships at Busi­ness Travel Di­rect, be­lieves the choice is now over­whelm­ing: “It’s a mine­field of con­tent par­tic­u­larly when try­ing to find the best rate as the OTAS like Tri­vago have con­fused the mar­ket. The rate may be lower but there’s no trav­eller track­ing, CSR or duty of care, for ex­am­ple.”

Op­ti­mis­ing ho­tel spend comes down to util­is­ing so­phis­ti­cated rate au­dit­ing tech­nol­ogy to find like-for-like lower rates and then re-book­ing. Of­ten these rates are lower than the cor­po­rate rate, which gives the travel man­ager lever­age for the fol­low­ing year’s ne­go­ti­a­tions or makes the de­ci­sion eas­ier to drop ne­go­ti­ated rates and RFPS and switch over to a dy­namic rate in­stead. These are a per­cent­age off BAR but could be as lit­tle a 4% dis­count.

“Ho­tels are mov­ing away from a static rate for 12 months,” says Click Travel’s Chris Vince. “It’s all about com­pe­ti­tion at the end of the day but a dy­namic rate is only great if you haven’t got huge amounts of vol­ume.”

An­drew Sisons, Strate­gic Ac­count Man­ager at Good Travel Man­age­ment, reck­ons ho­tel in­ven­tory now looks more like air­line in­ven­tory, by of­fer­ing highly-dis­counted, non-re­fund­able room rates.

Turn­ing up the vol­umes

Book­ing 100 nights per an­num in a small town will likely get you a dis­count plus an ar­ray of ben­e­fits, but a hote­lier in Lon­don won’t shift for that num­ber of bed nights.

It’s sup­ply and de­mand at work, sup­ported by very so­phis­ti­cated rev­enue man­age­ment soft­ware that in­flu­ences avail­abil­ity and pric­ing. How­ever, if a client can of­fer a min­i­mum of 500 bed-nights a year then ho­tels are more likely to be more flex­i­ble but there is a caveat here too: “Vol­umes of 500-plus will gen­er­ate deeper dis­counts but this will also de­pend on the cus­tomer’s spe­cific travel pat­terns such as days of the week, ad­vance book­ing be­hav­iour and the ho­tel size,” ex­plains Rachel Newns, Ho­tel Pro­gramme Man­ager, FCM Travel So­lu­tions.

If all your busi­ness is on Tues­days – a ho­tel’s busiest night – you’ll have less ne­go­ti­at­ing power than, say, book­ings on a Thurs­day or Sun­day night.

Sim­i­larly, if you can of­fer a ho­tel a spread of busi­ness – tran­sient, M&E and F&B – you are a more at­trac­tive cor­po­rate and more likely to ne­go­ti­ate dis­counts.

More­over, Vanessa Grif­fiths, out­sourced pro­cure­ment prac­ti­tioner at ROK Con­sult­ing, says that lux­ury ho­tels will of­ten be flex­i­ble

Book­ing 100 nights per an­num in a small town should get you a dis­count and ben­e­fits, but a ho­tel in Lon­don won’t shift for that num­ber of bed nights”

with lower vol­umes. “They’re hap­pier with smaller vol­umes,” she says. Rather than be swamped with a few larger ac­counts – which would be risky if they lost one of them – lux­ury ho­tels will of­ten take the lower-risk op­tion of more, smaller ac­counts.

She also be­lieves that of all the po­ten­tial soft ben­e­fits, Last Room Avail­abil­ity (LRA) – whereby a ho­tel is obliged to sell you its last avail­able room at your con­tracted terms and rate – is the most dif­fi­cult to ne­go­ti­ate. “You need high room night pro­duc­tion and tight con­trols in place to de­liver what you’ve promised,” she ex­plains.

Rates with ben­e­fits

More eas­ily achieved in the ne­go­ti­a­tions process, per­haps, are soft ben­e­fits such as free wifi ac­cess, cock­tails on ar­rival, F&B dis­counts, din­ner con­ces­sions, gym ac­cess (which in some mar­kets is charged for), early check-in, park­ing or a shut­tle bus ser­vice to/from the air­port. Each ne­go­ti­a­tion process is per­sonal to your com­pany and its busi­ness trav­ellers.

An­other cost-sav­ing strat­egy is to hand the choice back to the trav­eller and achieve higher pol­icy com­pli­ance. In­tro­duc­ing a rate cap by des­ti­na­tion al­lows the trav­eller to ei­ther splash it all on a five-star ho­tel out­side Lon­don and com­mute in, or down­grade to a Trav­elodge.

Putting it into prac­tice

It’s a frus­tra­tion for Richard Childs, Group Pro­cure­ment Cat­e­gory Man­ager at Biffa, whose sig­nif­i­cant ho­tel spend – the ma­jor­ity of which is do­mes­tic – con­sti­tutes 80% of the com­pany’s an­nual spend.

The spend may be size­able but it’s also frag­mented, which chal­lenges pre­ferred sup­pli­ers to ne­go­ti­ate dis­counts. Biffa’s sin­gle big­gest sup­plier, Premier Inn, ac­counts for just 15% of its busi­ness.

“Most ho­tels want 200 bed nights a year and above be­fore of­fer­ing a rate so it’s dif­fi­cult for us to get deals be­cause we haven’t got the vol­umes,” says Childs. “Our frag­mented spend is a frus­tra­tion as we know we could get bet­ter deals.

“We have deals with IHG, Premier Inn and Best Western and we use what­ever’s lo­cal to our site and ne­go­ti­ate pre­ferred ho­tels re­gion­ally,” says Childs. So the Vil­lage in New­cas­tle and the 2,000 bed nights a year the busi­ness can of­fer the Hol­i­day Inn in High Wy­combe – Biffa’s HQ – shaves some­thing off the rate.

Childs pays close at­ten­tion to quar­terly data in case new projects may have changed travel pat­terns and he’s

par­tic­u­larly keen to ne­go­ti­ate on soft  ben­e­fits such as free con­fer­ence rooms, park­ing, up­grades for di­rec­tors and free pro­jec­tor use for the com­pany’s M&E spend.

“Data is key to­day. We ne­go­ti­ate in De­cem­ber or Jan­uary for the fol­low­ing year and we mon­i­tor those rates. Rate au­dit­ing is re­ally cru­cial. What we’re good at is book­ing a long way in ad­vance say, 8-9 days out, but our big­gest chal­lenge re­mains book­ing ac­com­mo­da­tion in Lon­don. It’s ac­tu­ally cheaper for us to stay in High Wy­combe and get a taxi in. Usu­ally we can save £500 in to­tal,” says Childs.

Biffa’s travel pol­icy is sup­port­ive rather than a hin­drance so a trav­eller can stay overnight to make a 9am meet­ing the next day, for ex­am­ple. The com­pany’s £25 food al­lowance can be spent as they wish.

Short­cuts to dis­counts

Some TMCS help the SME by con­sol­i­dat­ing mul­ti­ple clients’ vol­umes. In­n­tel, for ex­am­ple, pro­vides a con­sor­tia pro­gramme. “It means that they ben­e­fit from in­creased vol­umes that they wouldn’t get them­selves,” says Dou­glas O’neill, CEO of In­n­tel.

In ad­di­tion, it’s worth try­ing IHG and Ac­cor as they both re­quire re­li­ably low spend for en­try into their chain dis­counts.

IHG Busi­ness Ad­van­tage pro­vides 4% dis­count off the chain’s Best Flex rates; Ac­corho­tels’ Busi­ness Of­fer pro­gramme pro­vides a dis­count on the BAR rate; and Hy­att Lever­age gives el­i­gi­ble SMES ac­cess to dis­counts of up to 15% off the stan­dard rate at cer­tain ho­tels. Moven­pick’s Part­ner Ben­e­fit Pro­gram – which kicks in at 50 overnight stays – pro­vides a fixed dis­count across any of its 84 ho­tels, for ex­am­ple.

An­other op­tion, al­beit a con­tentious one, is to re­ward and ben­e­fit fre­quent busi­ness trav­ellers at no cost to the com­pany by al­low­ing them to be­come loy­alty scheme

mem­bers. IHG, Hil­ton, Mar­riott, Wyn­d­ham and Ac­cor are pop­u­lar as they have a global net­work of brands at dif­fer­ent price points.

Ex­pect room up­grades, free wifi ac­cess, break­fast, ac­cess to the ex­ec­u­tive lounge of­fer­ing free meet­ing space, light meals and re­fresh­ment through­out the day. Many of these perks can ac­tu­ally help save the com­pany money.

Loy­alty pays

Such schemes for in­di­vid­ual trav­ellers work well in as­so­ci­a­tion with a com­pany's chain dis­count and re­gional or global re­la­tion­ship with a ho­tel chain.

FCM’S Newns says: “Align­ing the scheme with the com­pany cor­po­rate travel strat­egy is key, then the loy­alty gen­er­ated can im­prove ho­tel pro­gramme per­for­mance and ad­her­ence, im­prove trav­eller ex­pe­ri­ence, and it’s all funded by the ho­tel.”

Good Travel Man­age­ment's An­drew Sisons reck­ons it works best for com­pa­nies with a good num­ber of reg­u­lar trav­ellers, from around 25-50, be­cause they could ef­fec­tively earn one to two nights per week over a year that they don’t have to pay for.

Of course there is the grey area of just who should ben­e­fit from the perks ac­crued through in­di­vid­ual mem­ber­ships – the com­pany or the trav­eller them­selves, who may wish to spend the priv­i­leges earned on busi­ness in their own leisure time in­stead. Some com­pa­nies al­low mem­bers to use points to up­grade to a su­pe­rior brand within the same group which would oth­er­wise be above bud­get.

Wyn­d­ham Re­wards unites some 25,000 ho­tels, apart­ments and hol­i­day homes and is rated as one of the most gen­er­ous schemes in the mar­ket­place. It has a stag­ger­ing 56mil­lion mem­bers glob­ally.

Mem­bers earn a guar­an­teed 1,000 points for ev­ery qual­i­fied stay and can re­deem them for a free night at any of Wyn­d­ham’s prop­er­ties world­wide for just 15,000 points per room per night.

Ac­cor’s Le Club pro­vides re­wards af­ter only spend­ing 10 eu­ros. The scheme is based around four tiers – Clas­sic, Sil­ver, Gold and Plat­inum – and the group's bud­get brands such as Ibis and Ibis Styles have an even lower en­try level.

As with all these strate­gies, it’s about the time you put in to en­sure you can de­liver the vol­umes. Ne­go­ti­ate an an­nual rate for your ho­tel pro­gramme and leave it for 12 months at your peril.

Some TMCS help the SME by con­sol­i­dat­ing mul­ti­ple clients’ vol­umes. It means they ben­e­fit from in­creased vol­umes that they wouldn’t get them­selves”

Newspapers in English

Newspapers from Ireland

© PressReader. All rights reserved.