3 Hotel Negotiation Tactics Travel Managers Should Know
July 23, 2018
Is your company paying more than it should on travel? Many organizations do. You see, they don’t combine their business travel data with meetings and events data. So there’s no way to fully leverage their company’s spend.
Think of all the savings that slip through the cracks:
- There’s no way to know if employees are requesting company concessions.
- No way to leverage brand spend to negotiate better deals.
- No way to see where the company has cancelled meetings and take action to recover deposits.
- No way to know if key contract clauses are omitted from eRFPs, putting the company at risk.
According to GBTA, 80% of potential meetings savings comes from the venue sourcing process. We’ve seen many organizations leave more than one-third of their leveraging power on the table by not automating this crucial step.
Fortunately, a new generation of strategic sourcing solutions is changing the game for the better.
These solutions go beyond traditional eRFP tools, which focus narrowly on sending meeting details. Strategic sourcing solutions automate the entire booking path sourcing as well as stakeholder communication, venue negotiations and booking.
They do they heavy lifting for you. In the process, they automatically capture 10x more data. So you gain unprecedented visibility into your company’s meetings and events spend and savings in real time.
Here are responses to 3 burning questions travel managers ask about strategic sourcing. Answers explain how to gain visibility into meeting spend and get more out of hotel negotiations, using examples from today’s venue sourcing technology.
1. How can my company get better deals in today’s seller’s market?
Leverage brand spend
Transparency is your bargaining chip. Strategic sourcing solutions consolidate meeting and event data automatically. A centralized dashboard lets you see at a glance spend and negotiated savings company-wide. Pull reports on booked room nights by brand in a couple clicks. Who knows Your company may have dozens of meetings planned with one brand. Leverage brand spend to negotiate from a stronger position collectively than on an event-by-event basis.
Optimize brand performance
Analyze performance of preferred brands, too. Easy savings-to-spend ratios show at a glance which ones are going the distance to earn your business. Talk with underperforming brands about strengthening their offers. Then, shift business around to improve preferred brand compliance and better capitalize on your company’s spend.
Stack meetings, drive savings
Full visibility powers negotiations. Track meeting and event activity enterprise-wide. You can filter by brands, destinations, or venues your company has short-listed or booked within the last 12 months. To maximize buying power, have your team stack meetings with previously contracted hotels. And leverage multiple meetings at the same venue for even more savings
Compare Room Rates
With meeting spend visibility, you can easily compare guest room rates to see how each hotel stacks up against the others. Be sure to balance rates and other costs against concessions for a complete picture of value. Tracking room rate also yields insights about rates by destination and season. It’s a strategic way to score win-win agreements with hotel partners.
Drive more value with company concessions. Why not make free Wi-Fi in guest rooms a standard concession, for example? Add this and other core concessions to your meetings policy. Then, set concessions to auto-populate on every eRFP on your system. You’ll ensure everyone contributes to the savings even employees with no experience in hotel negotiations.
2. How do the new strategic sourcing solutions reduce risk?
Standardize meetings registration and approval
Now, you can centralize sourcing data without having to centralize teams. Using Stova venue sourcing technology, for instance, a simple online meeting request gets the process started. It gives you full visibility into all meeting and event requests throughout your organization. The technology automatically routes the requests for approvals to ensure appropriate workflow and improve meeting and travel policy compliance.
Focus on duty of care
In addition, new solutions automatically aggregate all company meetings on a global calendar, including travelers’ names, event dates, location and venue. In an emergency, you can instantly see which employees may be at risk for duty of care responsibilities.
Standardize contract clauses
Create a core set of contract clauses to reduce your company’s exposure to financial and contractual risk. Then, lock the clauses into every eRFP on your system enterprise-wide. Make sure cancellation and attrition clauses are reasonable to safeguard your company.
3. How can my team share its collective knowledge about venues?
Leverage collaboration tools
Strategic sourcing solutions skyrocket collaboration by connecting employees with meeting arranger responsibilities throughout your organization. The bottom line: With full meeting spend visibility, teams work collectively to better leverage volume and support your company’s business goals.
Share team knowledge
When you house meeting data in a central portal, it’s easy to share intelligence on suppliers. Team members can quickly view each other’s favorite venues from the search screen. They can also see coworkers’ notes about venues, both good and bad. It’s a simple way to spread the word about unannounced renovations and venues that have put the company at risk.
Redeem cancelled meeting deposits
Also share intelligence on cancellation credits. Many companies lose hundreds of thousands of dollars annually on meeting cancellations. Develop a cancelled meeting redemption process, so your team can rebook these venues and recover deposits.
Bolster the bottom line
The latest strategic sourcing solutions require minimal-to-no training. Yet they deliver powerful features to fit the needs of travel and meeting professionals.
Cost pressures will continue in 2018, driven by rising hotel rates and airfares, according to American Express Meetings & Events’ 2018 Global Meetings Forecast. Group hotel rates are expected to climb 3.5% in North America. Inventory simply isn’t keeping pace with rising demand.
Don’t negotiate with one hand tied behind your back. Manual sourcing and old-fashioned RFP technology won’t cut it in today’s seller’s market.
Leverage strategic sourcing to gain visibility into meeting spend and savings. You’ll boost your power at the bargaining table and strengthen your company’s bottom line.
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