.Buyers Employ New Practices To Deliver Rooms

<H1> Buyers Employ New Practices To Deliver Rooms</H1>By Linda Humphrey

The focus of many corporate hotel programs has shifted from saving on rates to saving space. Facing another fall in which hotel rooms will be sold out in most major cities, travel managers are devising new tactics to guarantee rooms, choosing online booking systems, forging two-year contracts and even buying room blocks or using corporate apartments for their transient travelers.

At the same time, techniques travel managers have used to drive down rates in the past are now being employed to ensure that rooms are available when their travelers need to check in. Time-honored techniques that are getting new twists to lock up beds for business travelers include incentives to increase compliance by scripting agents and setting per diems and consolidation measures to drive volume to fewer preferred hotels.

The change in the way corporate buyers are approaching hotels in this new market is palpable. "It's become less about 'how can we beat the hotel down for rate,' " noted Scott Deaver, Ramada's vice president of marketing.

Those who haven't changed their approach are getting a rude awakening. Hotels are casting off firms that don't meet room-night promises.

That's why travel managers have put new effort into reining in delinquent travelers and beefing up their hotel programs, said Frank Scaravaglione, director of industry relations for Rosenbluth International, Philadelphia. "The number of companies taking a harder look at their hotel programs today is 300-fold what it was two years ago," Scaravaglione said. "They're finding incentives to get their travelers to use the preferred properties."

Seeking guaranteed rooms with less 'blackout' time on rates, some have opted to buy room blocks. "They literally purchase the rooms for the year," said Scaravaglione. "I don't know if the market's ready for it, but more companies are asking for it." The catch, Scaravaglione noted, is that "you've got to buy the rooms for weekends too."

Westin's clients are requesting "bigger blocks than ever before," said Fred Kleisner, president and chief operating officer, adding that each hotel now deals with about four to six major corporate accounts. "Our corporate clients are focusing on guaranteed availability at reasonable rates."

Companies armed with room-night track records are seeking longer rate periods, such as a two-year deal, Scaravaglione said. Yet only long-term partners need apply, as V. Hobie Sheeder, director of travel programs for Korn/Ferry of Los Angeles, discovered. "I attempted to do two-year deals with some of the hotels, but they weren't willing because we didn't have the history."

Negotiating for amenities packages, such as breakfast, has actually fallen off over in the past few years, Westin's Kleisner said. "Even if breakfast is included, the company still pays for it, as some travelers-perhaps 30 percent-won't eat breakfast. No one is going to start stacking up free things on the table without going out of business. The customer ultimately pays."

Travel managers instead are struggling to keep tabs on where their travelers spend the night-with or without the coffee and bagels. Short of "a true knock-you-down mandate," more companies are delivering travelers to the preferred hotel by setting per diems, said Rosenbluth's Scaravaglione. Travelers who snub recommended hotels often are hit with surveys asking for their objections, Scaravaglione added. Other companies have gotten tougher, giving each department the option to mandate policy.

"We're moving in the direction of not reimbursing travelers who don't stay in preferred properties," said Lynne Ashmead, manager of corporate travel for Jacksonville, Fla.-based CSX Transportation, where about 60 percent of traveling employees stay in preferred properties.

Korn/Ferry's Sheeder has enlisted agents to "prefer-sell" hotels.

"We look at it like, let's sell them this program rather than shoving it down their throats. Our agents will say something like, 'we have a deal with this hotel, and if you stay there I'm sure that I can get you an upgrade or some VIP recognition because they're so excited to have Korn/Ferry as a client.' " Sheeder also plans to update travelers on his program via e-mail and to post daily travel bulletins, such as airport delays.

Agents also proffer the preferred hotels at Oracle Corp., where travel manager Lisa Piniella Shiveley e-mails policy-dodging travelers who rack up more than $50 above the cost of a recommended hotel. Currently listing its chosen hotels on an internal electronic Bulletin Board/Forum, Oracle plans to unveil an online reservation system by October that books the preferred properties only, Shiveley said.

As hotel programs become more complex, more companies have opted to get through the maze by outsourcing. Rosenbluth International's hotel team has taken on 30 percent more business this year, currently handling about a dozen clients for '97. Companies don't necessarily outsource from A to Z, "but sometimes we'll just do point A, C, D, F, Y, G, and then they'll take the rest of it and just put the pieces together," Scaravaglione said.

Another tactic he said corporate buyers are employing is to trim their hotels per city, usually from six to three.

Shifting travelers from upscale to midpriced hotels, an early-'90s tactic, still rates as a key strategy in many companies, including Eastman Kodak. "There's definitely more of a demand for the moderate segment," which usually offers free parking and breakfast as well as business services, Scaravaglione said.

"Trading down is still there," concurred John Russell, president of Hospitality Franchise Systems' hospitality division.

Still, a lot of travelers aren't willing to trade down. "Our business is going well, and when that happens you're less successful in pushing draconian cost savings measures," said Shiveley of Oracle, which tried to trade down two years ago without much compliance.

"I'd rather try to get a better hotel and pay a good solid rate for it than to save five bucks by putting someone in a lesser-quality hotel," she said. "We've learned a lesson that we just won't be successful with compliance that way.