< PrevNext > 2018 Business Travel Buyer's Handbook Setting Up a Corporate Lodging Program Share Download ChapterOverseeing a corporate lodging program can prove to be one of the most grueling and time-consuming aspects of travel management. A fragmented industry of hotel brands, owners and management companies, a sourcing cycle that can in its traditional form take months out of each year and a shifting landscape of technologies make it a challenging category for even experienced corporate travel professionals to wrangle. But, with lodging constituting the second-highest category of travel spend for companies behind airlines, the necessity of doing so is great. The good news is that a well-managed lodging program can provide benefits that outnumber the difficulties, including cost savings, improved compliance, greater safety and security and even improved traveler satisfaction. The following steps can assist in the development of such a program. I. Setting Goals & Strategies & Preparing for Negotiations Determine the goals you want to achieve in your hotel program, and evaluate the resources and time needed to accomplish them. Determine whether your hotel program will be mandated or strongly encouraged. Consider viability and the ROI of internally managing the entire process with your own team. Do you have the resources available, and do those resources have the required skill set? Otherwise, an option is to outsource all or a portion of the work to your agency—travel management companies often have a department that specializes in hotel sourcing—to a third-party sourcing company or a consulting firm. Determine your lodging strategy for the year based on your organization's requirements, your travelers' requirements and industry trends. Survey your top travelers to find out what matters most to them, including rate, location, safety/security and amenities. Share these goals with your hotel partners, as they may have additional suggestions and will have options to help you meet your goals. Be consistent with your messaging on goals to all suppliers throughout the process. Keep in mind current hotel market conditions and whether rates are likely to increase or decrease over the next two years. If they look like they will increase, consider pursuing multiyear deals. If they look like they will decrease, look for shorter-term deals.Identifying spend: Hotel spend can be as much as 40 percent of a company's T&E. It is not homogenous, and a fully managed program will harness direct participation from various internal groups and stakeholders. Involving all stakeholders at the outset of the project will maximize the accuracy of your spend data. Subcategories of hotel spend include business transient, project or extended stay, training, meetings and relocation, which might include serviced apartments. While each subcategory may require unique management processes, it is important not to manage hotel spending in silos. Fragmenting hotel spend will result in suboptimal data capture and loss of leverage, causing lost savings. For optimal discounts, know total spend by city, property and chain and understand your ability to shift share. Many booking tools offer the ability to tier hotels, identify best-value hotels and add notes to highlight hotels.Gathering data: Hotel sales managers expect business travel buyers to justify projected room night volumes before sitting down at the negotiating table. Buyers should approach negotiations armed with validated historical information to show the organization's specific travel patterns like day of arrival/day of departure, projected room nights and average rates. Prepare to review cost-of-stay information, use of Internet, breakfast and parking, as well as which costs are covered by your travel policy, including on-demand videos, fitness centers or laundry services. Where possible, include meetings-related room night spending, meeting space, food and beverage and equipment costs.Determine the needed fields of data, and if working with a company to consolidate your data, establish the correct fields to collect. If possible, collect data at the individual record level, not the aggregated level, to ensure detail. Use the following sources to collect hotel spend and room night data:Travel agency reports will contain your agent-booked data and also data from online bookings that feeds into the back office. If you have a direct relationship with an online booking tool provider, for both hotel and air, confirm whether the data is being transferred into the agency data. Note that travel agency reports are booked data, not consumed data, and can vary slightly to significantly from hotel reporting because cancellations, reduced stays or extended stays might not be reported back to the agency. Direct bookings, which can average as much as half of an organization's hotel bookings, also will be missing.Open booking data sources: A number of companies—including TripScanner, Traxo and Concur—can help aggregate data from hotel bookings made outside your TMC, but they require that the employee “opt in.” The best source to identify, by property, hotel spend that was not booked through the authorized TMC is your corporate card provider. You also can get data from your expense reporting system, though it is less granular.Credit card reports: To validate the value of the card spend, understand whether your corporate card is mandated, strongly encouraged or optional for hotel reimbursement. If possible, ask for meetings spend to be separated from transient spend. The utility of credit card data can vary by supplier. E-folios, which provides detailed spending data about hotel stays, is becoming increasingly available through corporate card providers and hotels but is not yet consistently available across all hotels within a chain or available from every hotel. Detailed hotel credit card data is not available in many countries outside the U.S.; additional analysis will be required to develop actionable data for negotiations. Research confidentiality laws if you use e-folio systems.Expense management system reports may be a challenge to use as they rely on individual travelers to input data. In many cases, critical fields may be missing, such as hotel name and address, which limits the value of the report. Understand exactly what spend is contained in these reports, and be prepared to explain the nuances. However, this report may well provide some indication as to leakage in your spend when compared to the credit card and the agency data.Hotel suppliers: If you are working directly with a chain through a national account manager, ask him or her to provide you with the hotel production report for the chain. Otherwise, you can contact the hotel directly and ask what data it has tracked. Compare this data to your own internal reports and question it if it varies considerably, as the data can be inaccurate.Meeting suppliers/meeting registration lists: A comparison of the different sets of data will allow you to see a more complete picture of your total hotel spend and identify gaps and weaknesses in the different data sets. Analyzing multiple sources of data will allow you to leverage higher volumes in your negotiations and to understand your marketshare potential.Airline data: This data point may capture a more accurate picture of regional or market room night potential by determining primary travel destinations. However, it cannot highlight travelers' specific hotel destinations, be they city or suburb.