Managing hotel spend: Simple rules for reducing business travel cost effectively
30th December 2014
Getting more control over your hotel spend, driving compliance and satisfying the ever demanding modern business traveller at the same time, is more challenging than ever for today’s companies. But unfortunately, it is an area which seems to be generally ignored within many businesses, although hotels and other accommodation can make up a large proportion of a company’s business travel spend, often even more than the air spend. With employees travelling at peak times and often having a short planning or booking period doesn’t make it easy for travel managers. Hotel rooms are frequently purchased on an ad-hoc basis with hotels which your company may even not have negotiated rates with, especially with regards to late bookings.
Below we’ve put together some simple measures you can adopt for reducing business travel spend on corporate hotel programmes effectively.
Implement a robust, relevant and flexible business travel policy
When speaking to business travel buyers of prospective clients with a preferred hotel programme, we often hear that their hotel programme does not fully meet the needs of their organisations business travel requirements. Often their travelling employees are not motivated to book hotels in compliance with the policy as their travellers do not understand its purpose or they may not even be aware of its existence. As a result, travellers struggle to see the added value of having a preferred hotel programme in place and ask questions, like ‘‘Why do I have to book the same hotels at higher rates via a TMC, when I can book them cheaper online on the internet?’
As a consequence, companies are challenged to encourage policy compliance and gain control over maverick behaviour of their corporate travellers. Implementing a robust travel policy with the flexibility for travellers to choose and book their preferred hotels at your negotiated rates, enables you to control better the business travel spend of your hotel programme and prevent leakage resulting from DIY booking behaviour.
However, no matter how dynamic or robust your travel policy is designed, it’ll only work if you regularly engage with all relevant stakeholders right from the start, throughout and after the implementation process. So, clearly communicate your new business travel policy across to all relevant stakeholders in your company, get and consider their feedback. This helps you to secure vital senior management buy-in and the support from travellers or travel bookers. Experienced business travel companies, like Flightline Travel Management, can help you create, review and optimise your travel policy accordingly, and spot additional savings opportunities for reducing business travel spend on hotels. Plus, with a stress-free joint-implementation programme that combines on-going professional consultation, one-to-one sessions supplemented by regular workshops and a tailored range of online and offline training resources you’ll ensure your corporate travellers and travel bookers understand your policy and its purpose at all times. A good travel policy, should drive compliance and be designed for support and enablement meeting the needs of today’s business travel market at the same time.
Purchase hotel contingencies in a bulk from a limited number of preferred suppliers
Decreasing the number of preferred hotels and purchasing hotel contingencies in a bulk from them, enables business travel procurement to focus on increasing their hotel booking volume with a selected number of suppliers. Carefully orchestrated negotiations with a limited number of preferred suppliers, for example through a coordinated request for proposal (RFP) helps you to achieve better-negotiated rates from hotels in response to higher booking volumes. Your business travel management company (TMC) can help you optimise this spend area, for example by using their knowledge and experience to negotiate hotel rates on your behalf, if needed.
Consider to use a tailored on-demand reporting system to consolidate travel data
Having the right data and full visibility on your hotel spending can strengthen your position, when you need to negotiate rates hotel suppliers. Our top tip as a business travel agents would be to consolidate your travel data by implementing a tailored centralised reporting solution. This way you can better understand your company’s travel patterns, easily measure if travellers comply with your travel policy and if they are charged the correct hotel rates. With the insight gained, you are able to optimise your hotel programme and reduce business travel spend more effectively. In addition, you are able to dramatically reduce the time you would otherwise spend on cleansing your business travel data. (Tips on how to make the most of your business travel data and analytics.)
Book inclusive hotel rates
Many travel bookers and travellers commit a major mistake and only look at the indicated price, rather than looking at what is included in the package. As a result they may just miss out on the best available hotel rate for their business trip. For example, think about companies where business travel is mostly or completely unmanaged. In this case corporate travellers typically book their hotels on one of the well-known consumer travel websites, such as such as expedia, booking.com, trivago, laterooms, hotel.com or hotwire.com – just to mention a few. However, depending on which travel search engine or supplier you use the same hotel may be priced differently. So, be smart and compare the rates offered and what they include. This way you can find out if you receive the same value-added services and whether you can reclaim VAT on the hotels booked. As depending on the payment options you may not be able to reclaim VAT on your hotel spend for bookings made on consumer travel websites, as opposed to reservations made on your TMC’s online hotel booking system. Thus, by using a TMC, you have a better chance to benefit from inclusive hotel rates offering more value-added services or amenities included in your TMC’s contracted negotiated rates for the same hotel or an even much better located hotel. So, if you compare prices carefully and focus on booking inclusive rates, you may discover that what appeared at first glance, the more expensive option, may well end up being the cheaper one providing more value for money and ultimately help you reduce business travel spend.
Consider video conferencing
One of the easier options is to ask your travellers whether they really need to travel or if video conferencing will suffice. Undoubtedly, we all know that business travel is a necessity to develop and maintain long-lasting relationships with client, suppliers or business partners. But, the more you cut down unnecessary travel, or more specifically the number of overnight stays, the more you can save on your business travel spend. In any case, you should have clear guidelines with a clearly defined approval process in place and communicate to your staff whether they are eligible to book a hotel or how much they can spend on hotels.
Have travellers book hotels online
Consider using an online hotel booking software, such as the Hotel-Line self-booking tool powered by Hotelzon. This allows you to reduce travel spend on hotels and accommodations. This way you avoid external booking fees, can make full use of dynamic hotel pricing and can book your own and your business travel agent’s negotiated hotel rates.
What are your top tips saving costs on your corporate hotel programme?
What are your preferred measures for reducing business travel spend?
Flightline Business Travel Management – Reducing business travel spend effectively
With over 20 years of experience and as a leading UK independent business travel agency, we offer tailored business travel services and solutions to enhance your corporate travel management and support you in reducing business travel spend efficiently. While driving company compliance, being cost effective, and assisting you to keep business travellers safe, we offer practical business travel solutions to SMEs and international companies to enhance the way your business travels. Discover how Flightline Travel Management can help you reduce your business travel spend effectively and enhance your employees business travel experience, give us a call today on 0844 332 0174 or make an online enquiry.