Filter in or out as many as 200 cities, as well as hotel and car rental class and meals of the day and watch as the per-diem calculator automatically adjusts per diems to your program. Drill down into cost breakdowns and export the results.
Olympia London - 26-27 February 2020
Loews Santa Monica Beach Hotel - March 11, 2020
Convene - 730 3rd Avenue, New York City - March 23,
BCD Travel today unveiled a new global hotel division and
branded service, Stay by BCD Travel, for managing hotel programs. The division
will be led by April Bridgeman, who assumed the newly created role of SVP of
hotel solutions two months ago while retaining oversight of the travel
management company's consulting arm, Advito. Bridgeman spoke with BTN lodging
editor Donna M. Airoldi about the strategies behind the new hotel initiative.
BCD Travel's April Bridgeman talks:
What's new about Stay by BCD?
Bridgeman: We have refined our spend management
strategies over years at Advito and are bringing those [into this product] with
some refreshed energy, new analytics capabilities and a new application we use
in sourcing. None of these strategies are new; they're just not adopted enough.
More clients need to go beyond sourcing. We not only bring all those spend
management strategies to the market but are looking at them dynamically and
making tweaks throughout the year.
BTN: How big is your new team?
Bridgeman: My new team will end up being somewhere
between 70 to 80 people. It's a combination of new and redirected resources, located
mostly in the Americas and Europe, honestly in all regions. We already have
people in all regions. Thirty to 35 people are being transitioned from Advito.
BTN: You just said companies need to go "beyond
sourcing," to achieve their program goals. What did you mean by that?
Bridgeman: There have been decreasing incremental
returns for years around sourcing. And the data tell us that our clients have
an opportunity to reduce the size of their negotiated programs. They're
negotiating rates and markets where they just don't have enough spend or leverage to achieve a competitive rate. They
end up sending travelers to hotels that are not really giving them anything in
return. [This sets] what we call an anchor price in a market, [where] the hotel
that appears first on the list of search results is not competitive. The
traveler then thinks, "Hey, it's OK for me to spend this amount. This is
what the company has negotiated." It can have all sorts of unintended
consequences. Our mantra around negotiated programs is consolidating and
reducing the number of hotels you have per market and diversification. It's
really important to not use the same hotels and negotiate with the same hotels
over and over again each year. It's important to create some competition and
leverage by changing those hotels. Also, to diversify the types of rates you
negotiate. There's a time and a place where static last room available rates
are great, and there are circumstances where dynamic rates are more appropriate
or dynamic rates with a cap. Our analytics tell us where we are going to be
better off by comparing what different ultimate price we can offer to our
clients and their travelers and different type of rate-structure scenarios.
BTN: What other spend management strategies do you
Bridgeman: Managing rate availability, holding suppliers accountable to
making rates available and price assurance, applying market-level rate targets.
People very much are impacted by the first price they see or the expectation
that is set when they're going to make a purchase. When we use rate caps in the
industry, you're setting the max that someone should spend, so they buy up to
that max. It's human nature. For one client, we implemented market rate targets.
This client saved more than double in the markets where there was no preferred
hotel or no rate target tied to a preferred rate. She saved 4.9 percent just
from manipulating rate caps and turning them into rate targets. She saved only
1.9 percent in preferred markets with the target at the top, the negotiated
rate. It can be a very effective strategy.
Another strategy is to increase content, to make sure you
are making available not just traditional [global distribution system] content
but also hotel booking aggregator content. Online travel agencies will
negotiate rates with hotels, and they also include a lot of hotels that do not
sell to the GDS and they have different pricing structures than you often see
in the GDS. There's no rate parity across any of those sources. The GDS may win
at 1 p.m. that day, but when you look at 5 p.m. Booking.com may win. It's
really important to bring not just more properties—some of those independent
hotels, but also the different rates you get from different sources—into the
booking path for travelers. If they don’t see the kinds of prices and hotels
they might see when they go out and shop the other consumer channels, they will
not have confidence that the [company's] hotel program is guiding them to a
good purchasing decision.
it sounds like BCD's position is that there is too much formal hotel sourcing
going on, and other strategies can accomplish a lot of a company's objectives.
Bridgeman: We want to deemphasize sourcing, the amount of time and
resources we spend on sourcing. You still need to do it, [but] you need to do
less of it and need to be more diversified in your approach. But companies can
get more value by spending the time on the other strategies: rate availability
management, price assurance, setting market-level rate targets and not caps and
keeping them fresh, adding content and merchandising.
BTN: How will you address rate, location and
Bridgeman: Our technology platform has very strong
content aggregation capabilities. It's very easy for us to bring in more
content, whether it is by integrating another hotel booking aggregator or OTA
content or by negotiating directly with properties ourselves. We have more
content right now than any other managed travel platform because of what we are
bringing together on TripSource Hotels. One other thing: We measure and actively
manage the availability of negotiated rates. For a typical client, 35 percent
of the time the negotiated rate is not available. Not only does that hotel
become a cost issue, it also becomes a traveler confidence issue. We have to push
the different booking platforms to help us manage more effectively, perhaps
[by] not give the hotel space at the top of the list when the rate is not
BTN: How will BCD's new hotel division help drive hotel
Bridgeman: One of the biggest issues is the
experience travelers have when they start to go through the shopping and
booking process for hotels. Is the way your online booking tool configured
going to give them confidence that you are bringing competitive rates to the
table? If you go into an OBT of many corporations, the sort default is to have
the preferred properties at the top, whether or not those preferred properties
actually are offering competitive rates at the time of shopping. And whether or
not those preferred properties actually have relation to where the traveler is [needs
to be located] in a particular market. Those [relevancy issues] can encourage
travelers to move on [to other shopping platforms]. Making sure travelers know
about the price assurance program, that they know the strategy you've taken and
the value of the negotiated rates you do have in the program are all ways to
boost confidence. Our team can help with that through digital marketing campaigns
and other strategies. The last piece is enhancing the experience. One of the
key things we offer is virtual payment and digital invoice management, and it's
about so much more than a lot of other tangible benefits. Virtual payment
decreases financial risk, fraud for a company. Digital invoice automation makes
it easier to reclaim value-added tax, particularly in Europe, but what it
really does is it reduces the number of items on expense reports for travelers.
It takes out so much friction in the payment and expense process today for
travelers. It can easily boost adoption for a program by 20 to 40 points.
BTN: There's also a concern regarding products like Concur
Triplink or Traxo, which enable travelers to go to any website, book and send
the data where it needs to go. Are those kinds of tools changing compliance to
just capturing the data?
Bridgeman: We have a solution that allows travelers
to add a booking to a trip, to send it in so we have the information for
security and other analytics purposes. But I don't think it's ever a good
solution to go to this supplier.com or that supplier.com because they're not
seeing that competitive content.
BTN: American Express Global Business Travel also
announced a new hotel position in late March, and CWT has RoomIt. What is driving
TMCs' focus on hotels?
Bridgeman: We have all the components of a
comprehensive hotel solution. Even two to three years ago, TMCs didn't have the
technology for content aggregation. Not just a TMC thing but also an OBT thing,
a GDS thing—we weren't necessarily able to bring that competitive content to
travelers. We didn't have price assurance technology. We didn't have the kind
of analytics you need where you're bringing together all sorts of data sources
to really understand the value of a negotiated hotel program, where it adds
value and where it doesn't. We can finally say to the marketplace, there's no
reason for your traveler to book outside the program and all sorts of reasons
to book inside the program. It's time to correct these issues.
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