Developing a preferred hotel program that provides cost savings for the organization and preferred room availability for business travelers can be hard enough under current conditions. Achieving compliance to preferred vendor programs might be tougher still. For those that have deployed travel management technology to establish a highly compliant airline program, some say the solution for lodging is a familiar one: online self-booking.
"In almost every case, the online booking tool has higher compliance to preferred hotel programs than telephonic agent-assisted reservations," said Jim Lee, executive director of the Travel Services Benchmarking Network, speaking at an Association of Corporate Travel Executives event in December and referring to observations by TSBN participants. "This is reality, and in some cases, it can be very significant."
Hotel is an area that traditionally lags in terms of corporate travel policy compliance; travelers are more likely to use a non-preferred hotel property than a non-preferred airline or a non-preferred payment option. Only a few of 28 companies responding to a TSBN survey reported 2006 preferred hotel program compliance above 80 percent, said Lee.
An Aug. 2006 PhoCusWright studypegged the "corporate best practice" utilization of preferred airlines at 70 percent and "about half that for hotel program utilization."
Why the lag? Many business destinations have dozens of hotels, but only a few within relatively close proximity to where a traveler needs (or wants) to be, particularly when conventions (and convention rates) are involved. Moreover, travelers often fail to recognize differences in two seemingly identical hotel rates, since some companies negotiate rebates, revenue shares and value-added amenities. Such familiar "leaks" as en route changes and loyalty programs further hinder compliance.
In addition, the channel in which a traveler chooses to make a hotel booking can impact the efficacy of the preferred supplier program, with higher adoption rates for online booking tools often a precursor to higher compliance. But Lee said less than one-quarter of 31 TSBN participants reported compliance to designated booking channels for hotel reservations above 65 percent.
To improve such penetration rates and allow travel managers to make better use of their companies' negotiated hotel deals, online booking system providers are offering user-friendly interfaces that resemble consumer sites, and better connections to hotel systems and global distribution systems.
More importantly, they are including travel policy parameter controls. "We have added at the end of the shopping path a reason code-when either you don't chose a hotel or you don't chose a preferred one," said Suzanne Neufang, vice president of product management and marketing for corporate solutions at Sabre Holdings' GetThere. "You have to tell someone in the company, through the booking tool, why you didn't chose a preferred hotel." Neufang said such controls helped some clients raise preferred hotel supplier compliance by as much as 20 percent.
American Standard Companies several years ago required travelers to book a hotel reservation along with their overnight airline trips-either through an agent or the online booking tool--yielding more than $900,000 in collected hotel commissions and lower room rates.
"The [online booking] tool lists preferred properties, low to high," said Tom Barrett, the company's global strategic sourcing director. "If travelers do not select one when booking an air reservation, the system may tell them that their reservation is not compliant, or it may generate an email to their managers."
If the potential benefits of expanded room availability and lower rates are not enough to persuade travelers to use an online booking tool, companies may consider playing up the safety and security angle. In sourcing hotels, buyers often vet properties based on such factors as fire safety; proximity to government installations and potential terror targets; the existence of parking garages beneath buildings; and the level of internal and external surveillance. These security factors are not readily apparent to those booking independently.
Moreover, by not using a preferred channel like a corporate booking tool, travelers may complicate their employers' efforts to locate them during emergencies. Traveler tracking, said TSBN's Lee, "is something that most travelers accept as reality and it can be a very powerful tool to help drive compliance."