Negotiating hotel discounts and optimizing savings is among the biggest challenges companies with midsize travel programs face. Yet according to new research by hotelCONNEX Strategic Solutions, ALTOUR’s hotel consulting partner, a focused sourcing process can yield meaningful results.The team analyzed its own mid-market client database, with clients ranging from $150,000 to $10 million in annual hotel spending, to identify the key influencers in determining program success. Key findings include:
Three quarters of the most successful hotel programs shared the following common traits:
- A procurement or travel manager oversees the travel program, negotiates with hotels, and has an employee policy in place that addresses hotel spend
- Spend is consolidated with one or two travel management companies (TMCs)
- The company has at least basic brand name recognition (which has proven helpful in bid responsiveness)
A big opportunity for improvement among many companies is traveler compliance in booking their companies’ preferred hotels in their preferred cities. Compliance does not mean making the program stricter, however. It actually means making the programs smarter by ensuring companies are leading with data and designing a strategic road map for their hotel programs.
In terms of broad findings across the client base:
- Seventy percent of firms had at least 50 percent of their total hotel spend concentrated in their top 10 destinations.
- 60 percent contracted with a single travel management company
- Less than half reported hotel compliance, defined as booking a preferred hotel in a preferred city (vs. a non-preferred hotel) of 65 percent or more.