CWT shows how companies can reduce hotel spend by 21%
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Hotel spend represents on average nearly 40% of a total corporate travel budget, but is often undermanaged according to a new study conducted by the CWT Travel Management Institute, the research arm of Carlson Wagonlit Travel (CWT). The ‘Room for Savings: Optimizing Hotel Spend’ report identifies seven steps that enable companies to reduce hotel spend by as much as 21%.
The seven steps are:
1) Consolidate data. Obtaining accurate, comprehensive data that provides a breakdown of room rates as well as additional expenses.
2) Understand traveller needs and behaviour. Selecting hotels with facilities aligned to travellers’ preferences.
3) Design an effective hotel policy. Including the mandated use of preferred hotels and preferred booking channels.
4) Optimise the preferred hotel programme. Negotiate a preferred hotel agreement whenever spend reaches US$10,000 at a particular property.
5) Negotiate effectively. Individual, property-level agreements tend to generate greater savings than chain-wide deals.
6) Improve traveller compliance. Travellers and travel arrangers must have easy access to the list of preferred hotels, as well as a user-friendly corporate online booking tool. Companies must follow-up with non-compliant travellers.
7) Track performance. A CWT audit of five companies’ hotel programs revealed that only 50% of negotiated rates were loaded correctly by hoteliers.
Christophe Renard, CWT’s Vice President of Business Intelligence, commented; “There are more than 250,000 chain hotels and independent properties that service corporate travellers worldwide. Pricing is complex and
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