Brian Nichols
Management.travel this week spoke with Brian Nichols, chair of the National Business Travel Association hotel committee, on the latest hotel developments for managed travel programs.
How are travel managers improving their companies' hotel programs?
There always is a focus on traveler satisfaction, savings and compliance, and on metrics around program management. There may be new issues around new technologies that affect how you approach those areas. In terms of traveler satisfaction, one increasing trend is the online adoption for hotel bookings. Travel managers are focusing on making the online experience easy and efficient. One of the key issues in that area is the accurate availability of rates and descriptive content that is pulled from the global distribution systems and other sources. Is the information there sufficient for a traveler to pick the right hotel? Does it provide a compelling reason for the traveler to go online to that tool and make the reservation? In general, you are seeing a growth in [capturing online hotel bookings]. I don't know that it is directly attributed to new technology. It is partly attributed to people becoming more comfortable with making travel reservations online and partly attributed to travel managers doing a better job configuring their online tools to display the appropriate hotels in a way that is meaningful to the traveler.
Regarding chronic rate-loading problems, some travel managers have suggested that the threat of excluding slower-loading hotels can be an effective motivator. What else can they do to further push suppliers and streamline the process?
It depends on which travel buyer. If one has the ability to actually exclude a hotel and direct volume away from it, then sure. That is effective. If it is a buyer that doesn't have the ability to do that, they may exclude the hotel but their travelers would be staying there anyway without a negotiated rate, so that would not be effective. A more rational approach is on the front-end, when you start the request for proposals, make sure your process starts and finishes early enough, and that you are communicating appropriately with your suppliers and your travel agency, and passing accurate rate-loading instructions. The ultimate goal is to have accurate rate loading on time, not to exclude hotels. The main pricing season is July through December. One approach to making that process less cumbersome is to review your hotel program on a monthly or quarterly basis and adding, or possibly removing, hotels as needed, so it is not as much of an overhaul at the end of the year. And if you set a timeline that allows you to complete your RFP process in mid-November, you have allotted enough time for rates to be loaded prior to January 1. A lot of buyers get into trouble when they communicate the acceptances to hotel suppliers in the second or third week in December. If you do that, you have already lost the rate-loading battle.
How are hotel companies applying dynamic pricing modelsand such yield management techniques as minimum-stay requirements?
With dynamic pricing, some hotel companies are pushing it as a primary pricing strategy. Others have the capability but are really only are providing it if buyers want to buy it. And then there are some hotel companies that are not able or not interested in offering it as a primary pricing strategy. There is certainly a lot of buzz around it, but in reality, there isn't a lot of hard details or data around it to review yet. Some travel buyers are testing it and others are waiting until there are more details available so they can make a decision. As far as yield management strategies, hotels always have had minimum-stay requirements. So it is not a new strategy, but it may come into play more often based on the higher occupancies. Corporate buyers are reluctant to agree to such terms, and there will be variation across the hotel supplier base as to whether or not you are going to be able to negotiate those. Those discussions are definitely taking place.
Are there any new hotel features in GDSs that can further facilitate a managed travel program?
A lot of travel buyers are focusing on using the content space within the GDS more productively, with more descriptive information displayed to their travelers and travel agents. Buyers are asking hoteliers to improve the way they describe their rooms and rate plans, and in some cases, to include information that is specific to their account. For example, if a hotel is a block away from an account's headquarters, include that in the brief blurb for the room type description, in the GDS. Give the traveler a compelling reason to make the reservation. Hoteliers often ask, "In the online booking world, how do we market ourselves to the end user?" The answer is improve the content that the travelers see at the point of sale.
Because free high-speed Internet access isn't offered by all chains, how does that impact managing a program?
From the travelers' perspective, there is a little bit of a disconnect. In the moderate-service brands such as Hilton Garden Inn, Marriott Courtyard or Four Points by Sheraton, it is provided complimentary. And the rates are much lower in those hotels, typically, than the full-service hotels. Then they are staying at a full-service hotel, where they are paying more--sometimes double--and the high-speed Internet is not included. It is completely irrational to the traveler. The feedback from travelers has made this a major issue for many travel managers.