Interview: Lodging Logistics CEO Bob Peper

Hotel request-for-proposal service provider Lodging Logistics during the past few years has broadened its scope beyond the electronic RFP tool to more of a "full-service sourcing" approach, according to owner and CEO Bob Peper. He recently spoke with Business Travel News lodging editor Michael B. Baker about developing and piloting with a handful of corporate clients new technology and the company's overall strategy.

How has your strategy shifted during the past few years?

It's positioning from providing just a tool to more of a fuller service in sourcing, which we've never done. In the beginning, we were strictly hands off on that, wanting to maintain that relationship between the travel manager and the hotels, but the world changed a lot since we first started. The opportunities now are really helping the client negotiate the best possible deal and get the data. In the last couple of years, we've been focusing on aggregating that data and creating processes to do it in a more streamlined fashion. It's really where we're growing the business, primarily in strategic sourcing: the analytics, the data consolidation and then the sourcing itself. We've really diversified. Instead of going after clients looking for an RFP tool, now we can compete against the travel management companies that are offering consulting and the consultants, and offer an alternative solution that is a lower overall cost with demonstrable benefits.

What new technology has this involved?

We have a new fuzzy matching engine that we developed last year. That's one of the bigger pieces of the results: If you can't get the records to match up to something that's useable, then you can't account for all of your spend. You leave a lot on the table. That's one of the core things we've been working on. The matching engine requires as little human intervention as possible. We're processing hundreds of thousands of records per file. You can't manually audit that. We're looking for the technology to streamline this, so there's not a whole lot of cost and time to the travel manager. Two or three years ago, when we started looking at this from outside providers on data consolidation, they would take weeks to get this process done. Now we've got it down to a matter of a couple of days, so we've really cut down the time required to analyze the data. This is such a labor-intensive process, so some do it only once a year, but with regular feeds, we can spit back useful, near real-time analytics instead of waiting a year to see where we are at now.

What sort of program adjustments have buyers made in using this data?

One thing we have done is, in terms of analytics, looking at the data at more of a concentrated, granular level in the market itself. So instead of saying we have New York, we can say we have New York Midtown, the West Side or the East Side. The hotels in Midtown don't care if they're not getting the business from people traveling into downtown, so that's something we added to give them more opportunities to negotiate with hotels, and also to see not only what their preferred hotels are but where the business is actually going. Say you have a preferred hotel with 500 room nights produced, but you have four other hotels in that same market cluster receiving another 500 room nights. If you can aggregate and move that share over to the preferred or identify a new preferred, you can have some additional savings.

Has your client base grown as a result of this?

Yes. We had a handful of clients that we piloted last year with the strategic sourcing, just to get all the kinks worked out, get the reporting and the analytics and streamline the renegotiation process so we can score the bid and generate an automatic notification based on that bid. We score the bid, and if they haven't met certain conditions, the renegotiation is set automatically and goes back through the process. We're trying to automate a lot of the work a typical consultant would put into managing a program.

Does it also give you new client bases to target?

We could eventually envision that the tools we've built internally for our clients could be offered directly to consultants for them to be more efficient. It's like back to the beginning, when we first started, seeing how inefficient it was to facilitate the basic RFP process, so we developed the process and streamlined that.