A typical hotel sourcing season for computer technology
company Dell ramps up in May, launches in July and wraps up right around
Christmas, after four to six rounds of negotiations. This year, though,
Kristina Laurel, global hotel program manager for Dell travel and expense, hopes
to shorten that season with the help of tripBAM.
“Year over year, I've been able to close our RFP in December,
but it's always at the last minute before Christmas Eve,” she said. “This year,
I really feel like I'm going to be able to breathe through the holidays, which
is really nice.”
Dell has been using hotel-shopping tool tripBAM for five
months, conducting same-property searches, or "shops," at its
preferred U.S. hotels. Now, Laurel is using the tripBAM data from those shops
in conjunction with detailed information from her preferred suppliers to decide
which hotel property contracts she should negotiate aggressively and in which
markets she could cut back on the number of preferred properties during 2016. “It's
about saying, ‘Which properties do we want to do this type of negotiation with,
and which do we not?’” she said.
In previous seasons, her company had negotiated with a hotel
whether Dell had 500 room nights at the property or 95. Dell’s global program,
which serves 42,000 travelers, includes more than 900 preferred hotel properties.
“I feel like I can be real about looking more closely at properties
where we have volume like 250 room nights or more,” Laurel said. “I can say to
the others, I'm not going to do the dance with you. You can either give me the
rate that I'm asking for, or you're not going to.”
TripBAM is best known for its hotel-shopping tool, its
“bread-and-butter service,” as founder and CEO Steve Reynolds calls it. But more
and more, he said, travel managers use the data that results from frequently querying
the same property or a geographic cluster to gain insight about their hotel
programs.
“It's getting a little mind-boggling how much data we
produce now as the results of our shopping,” he said, adding that some
companies have asked to pay tripBAM to run program bookings through the system
without actually shopping. “There’s as much value in that data as the cost
savings we’re providing.”
Using one shop at a property in New York as an example,
Reynolds said, tripBAM’s tool was able to beat a negotiated rate at the same
property 25 times, by an average of $36, in a single month. “That’s when the
travel manager can say, ‘It's time to renegotiate or we're going to kick you
out of the program’,” Reynolds said.
As of the end of August, Dell had received some hotel bids in
response to RFPs sent out in July. Each proposal increased last year's rate
between 8 and 10 percent, something she said Dell would never accept. “It
already says to me that there's going to be quite a bit of negotiation on the
front end,” Laurel said.
More challenges on the horizon for this season are securing
last room availability and ensuring that hotels provide it as promised. Though
LRA is difficult to secure, 99 percent of Dell’s preferred properties promise
LRA. This is the first year, however, Laurel has questioned whether the hotels
are actually applying it to Dell’s bookings.
“On paper it looks great: I asked you for LRA, you gave it
to me, we achieved it at 99 percent of hotels,” Laurel said. “But when I have
people coming back to me saying, ‘I don't know that this is exactly what
happened,’ and I've had to look a little more closely and ask more questions—I've
never been in this position prior.”
Reynolds has heard from multiple clients for whom hotels have
not provided LRA as contracted. “It's been a frustration with pretty much every
travel manager we work with. Some of them have even told us that the contracts
aren't worth the paper they're written on because this LRA issue is so bad,” he
said. “The chains are saying, ‘Look, I can give you the LRA rate or I can give
you a better rate, but it's non-LRA.’ What's the point of that if it’s never
available when [travelers] need it?”
TripBAM's rate enforcement
service, rolling out to select partners this month, addresses that problem. It
will check a traveler’s booked rate against the company’s negotiated rate to
ensure that the company is receiving its preferred rate and room type, if available.
If the traveler is not receiving the negotiated rate and the negotiated room
type is available, the system emails the travel manager or travel management
company.
“We get to provide full transparency,” Reynolds said. “It’s
live rate auditing, but it’s really live negotiated-rate auditing.”