Increasing the percentage of hotel bookings through a managed travel program leads to savings, but recent trends reveal a problem. Hotel leakage—when hotel bookings are made outside the program—is still happening. The reason: a failure to understand what specific factors drive hotel program success and how to win traveler support by marrying their needs and program goals.
What are the hotel challenges facing companies today, and what actions can they take to stop leaks in their hotel program? Here’s an overview of the problem and some solutions for bringing business travelers back into the fold.
We’re hearing the hotel arena is in crisis. What does that mean, and why is it happening?
The hotel industry is facing unprecedented change. Hotels want to decrease their cost of distribution while increasing their reach, so they’re looking for ways to do that. Meanwhile, travelers demand a free-choice environment, where a wealth of content and information is readily available, enabling independent decisions. They also want the freedom to self-serve and use the tools they find easiest and most accommodating to their needs.
All this leads to the gradual departure of travelers from company travel programs, particularly when booking hotels. And that adds a great deal of risk to a company’s travel program—and business overall.
But if you can navigate this new environment, it can be very rewarding. You just need to know how to navigate successfully.
What’s driving travelers’ new demands?
A variety of things drive the new demands, from demographics to technology. Over half of today’s travelers grew up in an online world. So, for them, being online is expected; it’s just a normal part of life. These travelers are also increasingly mobile. In fact 75% agree that their mobile devices are very important, even critical, to their day, and a third of them connect via mobile more while on the road than when they’re at home. And then there’s the exponential advancement of technology and personalization in the consumer environment, which sets expectations that spill over into the corporate environment.
Why are travelers leaving the program?
Every company experiences some level of hotel leakage—evidence that the corporate travel program isn’t consistently providing what travelers expect. Today’s travelers use the tools and services that work for them personally. Since many corporate traveler tools simply don’t allow the flexibility and don’t provide the user experience they seek—and their companies often don’t mandate booking hotels through the program—they quickly find alternatives and book outside the program.
What risks do companies face with hotel leakage?
There are many; however, the most obvious are fragmentation of their hotel program and increased vulnerability when it comes to duty of care. When travelers book outside your company’s hotel program, you lose hotel volume and, therefore, negotiating leverage with preferred suppliers. That’s a bottom-line hit. And when there’s a disconnect between air and hotel bookings, you risk your ability to care for your travelers in a crisis. Even if you have both the air and the hotel booking data, but it’s spread across different booking channels, it can take precious time—time you may not have—to consolidate that information to ensure you’re getting to your people in the right places in time to offer assistance. Sadly, in today’s environment, this cannot be compromised in any way whatsoever.
Beyond these, there are other risks like losing control over the day-to-day traveler experience, as well as missing out on holistic business intelligence that you can use to improve your program overall.
In the end, hotel leakage dilutes the value of your program; lessens the impact you can make on your company’s business; and exposes potential risks to traveler security.
What can companies do to bring travelers’ hotel bookings back into their program?
Travelers have spoken with their actions. They’ve abandoned the preferred booking channels when it comes to hotels and have chosen the booking path that suits their personal needs. So, first, engage with them and listen. Ask what they like about those tools: What’s working for them? Ask them why they’re driven to book outside the program. Look for trends versus outlier responses. And when you find the trend, take note.
We tend to see a lot of travelers doing their own thing, much like I mentioned above, particularly using apps they like to use. That’s not all, though. Travelers want superb content—properties and rates—that’s relevant, readily available and easy to digest so they can make good decisions. What works is giving travelers abundant content so they can be confident they’re making informed decisions and then giving them the tools they want to use.
We’ve seen hotel booking agencies, online travel agencies and brand.coms declare they have the most content or the lowest rate—or both. Fact or fiction?
Here’s the truth. There are a lot of property and rate options across a wide range of content providers, including online travel agencies (OTAs), hotel booking aggregators and hotels themselves. So, for most companies, a partner that can consolidate content across a wide variety of providers is best. Some companies believe travel agencies use only GDS content. That’s simply not true.
BCD Travel, for example, consolidates content from the GDS; multiple hotel booking aggregators and OTAs; our proprietary BCD Travel Global Hotel Program; and our clients’ own negotiated programs. That means our clients’ travelers can see a huge range of available properties and rates and make informed decisions about their accommodations. Having all this content available in one place provides them with a more seamless booking experience in an end-to-end environment and saves travelers a lot of time versus shopping around on different sites. Plus, it increases their confidence in getting the best rates and keeps them coming back to their company’s program time and time again.
Providing superb content sounds like one way to keep travelers in the program. What are other ways?
As I mentioned before, traveler affinity to tools trumps loyalty to the program. Travelers use the shopping and booking tools that work the best for them, and those typically have not included the corporate booking tool. That’s why BCD developed a consumer-grade shopping and booking tool, TripSource, modeled after the tools travelers like to use. We did a lot of research with travelers and designed from scratch to ensure TripSource met travelers’ high standards. And that approach worked; TripSource has proven to be a tool travelers proactively choose to use. Now our clients’ travelers book their hotels through TripSource, and we’re not only giving them a great shopping and booking experience, we’re also bringing them back into the program voluntarily.
Another thing: You need to be able to care for travelers on the road. Today, it’s necessary to assure travelers that their company will know where they are when they need assistance most, and also and to provide corporate clients a complete duty of care offering. It’s no longer a situation of ’if a crisis occurs,’ but ’when a crisis occurs.’ So you need a partner that enables you to locate and reach travelers quickly and precisely to provide help. That’s best accomplished if both your air and hotel data is with one company. It’s most difficult when your travelers booked through a channel you have no connection with. And there’s a wide range in between. When your travelers know you have their back, no matter where they are, they’re more likely to book through your channel.
What about traveler engagement? What are the best ways to inform travelers about the benefits of booking hotels within your corporate program?
Engaging travelers in the program is critical. There’s no one way to do it right; rather, you have to tailor the strategy to your traveler audience and the communication channels they engage with most. At BCD, we have traveler engagement strategies tailored to our clients’ specific needs and traveler demographics. We help our clients proactively reach out and make travelers a part of their program, so they understand how it helps them and have a stake in its success.
Any more advice you’d give companies on hotel leakage?
Contrary to what many hotel providers claim, there’s no one company that is going to give you absolutely everything. You’ll have to evaluate each potential partner carefully to understand what they offer, and then make well-informed compromises. At the end of the day, look for the best long-term partner, the one that has the fewest or shortest-term compromises. And look for the partner that has a plan for bringing your travelers back to your program. That’s the first step in navigating this new environment and creating a hotel program that adds value to your overall business.
