This month we are encouraging procurement and travel buyers to review the effectiveness of their hotel procurement programmes to ensure that companies really optimise their hotel procurement and make substantial savings.

Procurement and travel management departments can benefit from consolidating and outsourcing the sourcing process to a third party, such as ourselves, as it reduces internal processing time and ultimately drives savings in hotel spend as it removes the pain of complex and time-consuming room rate negotiations.

With accommodation costs accounting for some 22% of total travel costs*, companies are increasingly starting to realise that by accessing data and consultation services on an annual basis, they can really optimise their hotel procurement and make substantial savings.

Leveraging a single platform to tackle the entire procurement chain drives greater efficiencies, improved visibility and ultimately greater savings. With our Intelligent Sourcing offering, we are well placed to offer above-average response quote thanks to our extensive global network. Having local market managers abroad involved in international negotiations gives us the upper hand in terms of coping with time differences, language barriers and regional outlook.

Here are some handy tips when reviewing sourcing strategies:

1.  Evaluate hotel spend and design an effective programme strategy. The first step in optimising hotel spend is making an accurate assessment of where the programme stands in terms of spend the corporate hotel policy, preferred supplier rates, negotiated conditions and the ability to book through global distribution systems. Once a clear and concise overview of bookings has been obtained, specific recommendations for actions can be derived and formulated.

2.  Reduce the hotel portfolio in order to decrease the rates by bundling the volume. Bundling hotel volume leads to a reduction of average rates per room night.

3.  Include newly-opened hotels within your reduced hotel portfolio. When given the chance to bid alongside established hotels they are likely to offer competitive rates and will give your hotel programme a more efficient structure.

4.  Consider distance of hotels from work locations in order to reduce the total cost of the trip. The hotel may be cheaper, but how much does it cost to get there if it’s further away?

5.  Don’t forget the employee-preferred hotels to encourage compliance. One of the main frustrations for procurement professionals is leakage from travel programme. Without compliance you it is not possible to achieve the efficiency and cost savings that full control brings. Having the right hotel portfolio for travellers will have a direct impact on compliancy to travel policy.

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* According to the Concur T&E Report 2012

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