Study: Adjustments in Hotel Purchasing Increase Savings and Satisfaction of Travelers - Under-Year Rate Negotiation (Continuous Sourcing) Replaces Traditional RFP Process
Cologne / Alexandria, USA - April 26, 2018 -
ACTE Global (Association of Corporate Travel Executives) and HRS have announced the results of their latest study. This focused on the development of hotel shopping in companies. The study "A new dimension in hotel sourcing" found that more than half (51 percent) of companies have changed their approach to hotel purchasing over the past three years, with the majority reporting new savings opportunities.
There are many challenges to negotiating and purchasing hotel rates, including rising hotel prices, a fragmented hotel market, and the time spent on traditional sourcing. Forty-eight percent of travel managers who have optimized their hotel program stated in the survey that they wanted to outsource part or all of their hotel shopping to a global hotel solution provider or outsourced specialist. The study also shows that the way companies, especially larger, multinational corporations, are negotiating with hotels is changing:
- Companies working with a global hotel service provider or consultancy report annual savings of seven percent. In comparison, the savings in working with a business travel bureau (TMC) are four percent a year.
- About one in ten (11 percent) already applies Continuous Sourcing - a relatively new practice that looks at hotel shopping year round - rather than a limited time tendering process (RFP) at the end of the year. These companies report positive changes, such as improved passenger compliance and satisfaction, financial savings and greater flexibility in the hotel portfolio.
- One of the biggest barriers to adopting Continuous Sourcing is a lack of knowledge about this approach: 42% of Travel Professionals who have not implemented Continuous Sourcing are unfamiliar with it. About a third (31 percent) have no time or resources to take care of the introduction.
- One fifth of travel managers (20%) report that they are not aware of any business changes beyond the RFP season that could impact their hotel programs - such as increasing demand for hotels in a new geographic market. This suggests that travel managers can more flexibly respond to changing business developments through continuous sourcing.
"We live in an age of information overload and constant change, and failures to respond quickly to market developments can be costly to travel agents, both financially and in terms of traveler satisfaction," says Greeley Koch, Executive Director of ACTE. "More than half of the first users of Continuous Sourcing reported savings, demonstrating how travel managers can position themselves as innovators in their changing business world using state-of-the-art methods."
"With Hotel Sourcing, companies have the best opportunities for making financial and strategic changes to their travel program," says Marco D'Ilario, vice president of sourcing at HRS. "This global study shows how companies can leverage new opportunities and irrefutable data for their travel management to deliver not just savings, but better performance."
More information on "A new dimension in hotel sourcing" can be found here. The results of the study will also be discussed at the ACTE New York City Global Summit and Corporate Lodging Forum during a lunch-and-learn session on April 30.
About the Study: ACTE members around the world (Americas, 38 percent, EMEA, 38 percent, APAC, 24 percent) were electronically surveyed from February 20 to March 5, 2018, about strategies and challenges in the hotel sourcing process. In total, 226 executives answered the survey conducted by Rockbridge Associates, an independent research firm.
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