Case Study: Hotel programme drives compliance and savings
What was achieved:
With 359 hotels in 28 countries booking 61,000 hotel rooms worth $13.6m, our client’s current programme had compliance of 80% and coverage of 93%. Working together, savings of 4.5% were found in our new programme with a rise in the number of hotels to 402 and compliance increasing to 89%.
What we recommended:
We suggested 5 specific proposals for change based on the client’s objectives of consolidating properties, containing costs, designing a diverse programme to increase compliance and satisfaction, and placing a focus on locations to minimise transport costs.
A realigned hotel programme to meet the changing needs of the business through enhanced traveller experience, improved duty of care, compliance, improved choice and rate reductions.
A new interactive online hotel directory including geo-mapping of office locations, preferred hotels and a direct link to Google Maps to help with transport options, directions and nearby conveniences.
A frequent travellers and bookers survey for insight into their preferences and new location requirements to assist with the design of the new hotel programme.
Outsourcing hotel RFP and programme management to take in resource time savings, expert industry knowledge, an efficient e-sourcing platform and global benchmarking.
An audit of global rates to ensure all negotiated rooms were loaded correctly with inclusions and their conditions audited so no money was left on the table.
How the results were delivered:
On top of introducing 64 new hotels and removing 20+ due to rate increases and traveller feedback, programme compliance went up by +9%. There was also a +20% improvement in the consolidation of bookings through the TMC.
By negotiating competitive rates lower than the ARR forecast, there was an increase of 5-11% in the top 5 cities while the introduction of eight chain agreements saw savings of 10-15% off BAR.
Besides implementing complimentary and discounted ancillary services, merchant fees were also negotiated, waived or reduced across suppliers, and a strategic selection of 4-4.5 star accommodation with lower room rates and amenity cost replaced traditional 5 star hotels while still maintaining comfort for travellers.