The Airlines Reporting Corp. last week announced its new Corporate Reservations Service Provider (CRSP) participation status to help track hotel bookings and commissions, and credited Hotel Solutions president Bob Langsfeld for helping develop it.
Hotel Solutions also forged relationships with Pegasus Solutions and The Eastman Group to streamline the recovery of hotel commissions and execute pre-trip hotel rate audits for corporations.
"Agencies and Corporate Travel Departments have long enjoyed accurate and timely tracking of travel spend and commissions," according to ARC vice president of marketing, sales and customer care Mike Premo. "This new level of participation allows corporations clearer visibility of their bookings with all suppliers who rely on the ARC identifier for volume tracking and commission payments [and] provides a simpler application process than our full air-ticketing CTD status."
In conjunction with Hotel Solutions, the new ARC status helps users track hotel bookings using a unique ARC number separate from air and car reservations. For participating corporations, ARC separates hotel reservation tracking from the rest of the booking and provides that data feed to Hotel Solutions.
ARC said it had already received applications for the new designation, which comes with a fee that Langsfeld said Hotel Solutions would pay. The Hotel Solutions client is listed as the "payee" on the weekly ARC commission processing report. Hotel Solutions also takes the data feed into a system co-developed and hosted by The Eastman Group to reconcile against the commissions received and seek recovery of the rest. It integrates with Pegasus Solutions' commission processing to further identify and recover commissionable revenues. Room rates, taxes and other "level 2" data are among the "robust data feeds" that Pegasus will add to the equation, Langsfeld said.
In the pre-trip audit, Hotel Solutions works with its customers and their online booking providers and/or agencies to queue or send a copy of the hotel booking to Hotel Solutions through the Sabre, Apollo (Galileo) and Worldspan global distribution systems. Hotel Solutions analyzes all reservations to determine whether they were made at preferred properties, at the negotiated rate and whether there are lower rates available at that property, or others, Langsfeld said.
"Pre-trip is as lucrative--if not more so--than commission recovery. The only way to save is pre-trip," Langsfeld said. The company has found the error rate on bookings is more than 20 percent.
In a four-month study of 15,336 bookings worth $6.4 million for three clients, Hotel Solutions "identified 'potential savings' of $300,000, or almost 5 percent of total hotel expenditures, Langsfeld said. Only 48 percent of the hotel bookings were at preferred properties. Of the preferred bookings, 1,507 were booked above the negotiated rate. But savings of up to 15 percent could be achieved if the corporations booked rates lower than the negotiated rates available at their preferred properties, the study found. The three companies are projected to receive commissions on certain hotel stays of about $1.5 million, Langsfeld said.
On recovery, Langsfeld said, his company has secured between 67 percent and 87 percent of the commissions due. "We expect to see it in the low-to-mid 90s with the new ARC designation," Langsfeld said. Recovering hotel commissions for the past year, Langsfeld said he has found that properties pay weekly, monthly and quarterly. Sometimes it takes six months to receive the hotel commission, but most of the large corporate chains pay weekly.
Chasing hotel commissions is one of the most frustrating elements of running a travel agency. Hotel commission recovery competitor eCommission Solutions in a recent study found that 20 percent to 40 percent of hotel commissions go uncollected. For a travel agency that books 2,500 hotel segments a month, eCommission Solutions found an average of 500 hotel segments were missing from the back-office application. "Of those 500 missing segments, an average of 25 percent, or 125 segments, will require dunning activity. The average collection of $22.60 per segment results in $2,825 collected, minus a collection fee of $110," the company stated.
The eCommission Solutions process "has delivered a 40 percent increase in our collected commissions," according to Randolph deGooyer, vice president of business processes for Halifax, Nova Scotia-based Maritime.
ECommission Solutions captures all reservations, changes and cancellations made on all GDSs and mid-office systems, then uses tools from Grasp Technologies to de-dupe and clean the records to identify recoverable commissionable on bookings with non-ARC participants, including lodging, ground transport, car rental and tour providers, among other segments, according to eCommission Solutions president and CEO Paul Hoffmann.
Hotel Solutions provides pre-trip hotel rate audits, as well as commission recovery services to five corporations, but soon plans to add four more. It has been collecting an average of $30,000 in weekly commissions, but expects to grow that to $100,000 weekly once it begins to service the new corporate clients, Langsfeld said.
To sell the automated solutions, Langsfeld has teamed with former travel manager, consultant and most recently Eos sales manager Andy Menkes, as well as industry veteran Frances Booker.
"We're seeing indications that it's better to have commissionable rates than noncommissionable," Langsfeld said. "We need more data," but initial results indicate that commissionable rate buckets were more readily available.
In the study for his clients, Langsfeld said one company "has made significant shifts in their travel patterns, is currently experiencing cost savings in excess of $100,000 from pre-trip rate monitoring" and has identified significant hotel commission recoveries. Another client, he said, "exceeded their prior year's commissions from hotels by 72 percent, exceeding $750,000 per year," while a third more than doubled its annual hotel commissions to $320,000.