Lodging is the problem child of most corporate travel programs. Travelers book outside policy because they think they can find lower rates elsewhere. Now you can provide the best rates within your program and get better reporting, easier contract management and safer travel.
It’s the burden every travel manager has to bear. Whether at the water cooler or on a company’s internal social network, employees regale co-workers with stories about finding lower hotel rates outside the official travel program. The stories have become more frequent—and detailed—as business travelers have become savvier users of online consumer travel sites.
Sometimes travelers think they’ve found a less expensive hotel rate. But terms, conditions and features often prevent a straightforward comparison. Does the traveler want to prepay a month in advance to save €2 a night? Is the free WiFi being taken into account? What about the extra taxi fare they’ll pay when they “save” $5 on a hotel room that’s farther away from their meeting?
What’s more, the value of in-program booking isn’t just found in room rates—data collection, safety and security and traveler satisfaction also are key. And the “solution” of just adding more hotel content via a stand-alone hotel booking agency can actually create more problems. It might even hamper broader corporate goals.
“There are a whole series of trade-offs buyers make if they don’t use their travel management company for hotel bookings alongside the rest of their travel program,” says April Bridgeman, BCD Travel’s senior vice president of Strategic Marketing. “Tracking and helping travelers in an emergency becomes harder. Travelers have to call two different companies if they want to change their plans. Travel managers end up with two sources of hotel-related business intelligence data, instead of one—and two contracts to manage. That’s a lot of compromises to put up with, especially when the idea that travelers are missing out on the best rates is more perception than reality.”
Hotel attachment indicates program success
Travel buyers often gauge the health of their hotel program by monitoring their “attachment rate”—the percent of room nights made in conjunction with overnight air and rail bookings. If the attachment rate is below 70%, that’s a strong indication that travelers are looking—and booking—elsewhere.
When Hitachi Data Systems realized its attachment rate had fallen to 53%, alarm bells started ringing, and the company turned to BCD Travel for help. Working hand-in-hand with BCD, Hitachi launched an all-out effort and its attachment rate shot up to 95% in just 18 months. The company also saved $1.9 million over two years by bringing maverick hotel bookers back into the managed program.
“Three-quarters of the problem was that travelers did not understand the cost to the company when they booked independently. They didn’t realize they were missing out on preferred rates or that we couldn’t track them if there was a crisis,” says Lisa Wilke, a BCD senior director and the leader of the team that worked with Hitachi Travel Manager Denise Adleman to create the impressive hotel attachment gains.
Hitachi’s solution (see sidebar) centered on communication—explaining the hotel policy to travelers, as well as helping them understand why it mattered to the company’s success and how employees played a role. Ultimately, travelers across the company understood what was expected of them.
Sourcing content that’s right for customers’ travel programs
Bridgeman says companies that want to improve hotel attachment must begin by addressing employee perceptions that there are lower rates elsewhere. “Otherwise, rates will continue to create noise for travelers and travel managers alike, distracting everyone from the more important issue of meeting overall strategic goals,” Bridgeman says.
Much of that “noise” is outdated. Years ago, hotel aggregators swayed some corporate travel programs to book hotels outside the travel management company and GDS. But as aggregators and GDSs come together, companies don’t have to make that choice anymore. They’ve figured out that the actual savings, if any, aren’t worth separating the hotel booking from the rest of the trip. In reality, not booking through the managed channel results in spending more, not less.
“The GDSs have more content than ever before. That means BCD Travel’s staff and our online tools can offer more options to clients. Travelers don’t need to go rogue from a misguided belief that their ‘pure consumer’ process will beat managed travel,” Bridgeman says.
“Equally important, businesses get the data collection and security benefits of a unified booking process,” she says. “Plus, it’s easier to track and help travelers in an emergency, and they have just one contact when they need to make booking changes. That improves traveler satisfaction.”
Hotel strategies should align with broad goals
Companies should map a hotel strategy that uses the right tools, services and strategies to improve total savings, total cost of ownership, risk mitigation, safety and security and traveler satisfaction. Bridgeman says travel managers must think through how they can leverage business intelligence to improve security and procurement. They should connect with consultative experts who can guide them toward the best possible sourcing. And they should improve outdated payment processes by bringing in new technologies, such as virtual payments and automated VAT reclaim.
Alongside all these program-management improvements, it’s crucial to remember traveler management, too, she advises. Managing policy is clearly crucial, but so is communication. Travel managers must help travelers understand the smartest booking choices—for themselves and the company—and guide employees toward those options.
“Travelers have become empowered consumers, and that means the need to influence them is not only greater than ever, it’s also evolving,” Bridgeman says. “It changes the way travel managers talk to travelers about their behavior. Here’s an example: Travelers have learned as leisure consumers that the best rates can be booked either long before arrival or at the last minute. So, they may think they are doing the right thing by booking at the last minute. But if there’s a convention in the city they’re traveling to, they’re in trouble. It’s really important to explain to your employees why they must book hotels at the same time they book their flights.”
With a more balanced approach that goes beyond content, travel managers can make giant strides in improving their hotel programs. “You need all content wrapped up in one search with no trade-offs, like unconsolidated data. You also need a better experience for your travelers, powerful business analytics and a flawless payment process,” Bridgeman says. “Now it’s much easier to hit all those targets.”
Check out an infographic on hotel content myths and facts. And ask your account manager for more details on how to shape a broadly strategic hotel program.
Case study
How Hitachi Data Systems boosted hotel attachment and saved $1.9 million on hotel spend
Hitachi Data Systems brought maverick hotel bookers back into the managed travel program with a communication-centric strategy that helped employees understand the company’s hotel policy, its importance to the bottom line and what was expected of travelers.
Dealing with out-of-policy rates
To instill confidence in the official program, Hitachi told travelers that if they thought they had found a lower rate elsewhere, they should check against Hitachi’s preferred rates. If the unofficial rate was lower, travelers alerted BCD Travel, which investigated and booked on their behalf if it really was a better deal. “It caused a little pain at first, but it helped bring travelers back to the program,” explains Lisa Wilke, the BCD senior director who led the team that helped Hitachi make its impressive hotel attachment gains.
Introducing reason codes
If travelers declined to book a hotel at the same time as their overnight flight, they had to give a reason during the booking process.
Adding weekly exception reports
BCD provided weekly reports to Hitachi’s regional travel managers to let them know about declined hotel bookings and the related reason codes. Unless the reason for declining was considered acceptable (like staying with friends or family), the travel manager would forward the report to the traveler, often before their trip started.
Approving high-level expenses
Hitachi required travelers to attach their trip itinerary to their expenses report to show they had booked their hotel through BCD. Travelers without this proof were required to apply to Hitachi’s global executive committee for reimbursement.
