What’s the best way to manage hotel spend?

Rachel Newns, FCM’s Hotel Product Manager explains the three key elements that are needed to control hotel costs. Combine all three to ensure clarity for your travellers and deliver value on your overall spend.

1. ESTABLISH A PREFERRED STRATEGY FOR YOUR HOTEL PROGRAMME WITH REGIONAL AND GLOBAL CHAIN AGREEMENTS BY:

  • Targeting key hotels and locations with named, specific hotels and discounted fixed rates. Use allocation for very high-volume locations where availability causes issues. Agree amenities as part of the rate to reduce overall cost of travel.

  • Implementing one or more chain agreements to provide discounted rates in non-core locations and to provide additional options during peak nights.

  • Using TMC discounted rates to provide an additional layer of value and benefits where you have no preferred rate or chain coverage.

2. CLEARLY COMMUNICATE THE TRAVEL POLICY AND PREFERRED HOTEL STRATEGY, BACKED UP WITH PREFERENCING AND ENFORCEMENT, THROUGH YOUR BOOKING TOOL AND TMC:

  • All travellers should understand what you expect them to book and know how to view your company preferred hotels prior to travel booking. Consider room type, rate, preferred hotels and chains, acceptable inclusions, booking channel, advance booking periods and exceptions.

  • Rate caps can work well but beware of setting a ‘target’ for travellers to achieve rather than a maximum price permitted. Consider why you need a rate cap and what you expect it to achieve.

  • Consider using hotel reward programmes to incentivise travellers to adhere to the travel programme and generate value for your company.

3. TRAVELLERS NEED TO DEMONSTRATE GOOD BOOKING BEHAVIOUR AS THIS WILL MAXIMISE THE VALUE OF YOUR HOTEL PROGRAMME. ENCOURAGE THEM TO:

  • Book well in advance whenever possible

  • Use the programme’s preferred hotels – this will ensure value for money is achieved via discounts and amenities, traveller experience is consistent, traveller safety is considered and future agreements supported

  • Book through the correct channels – this ensures visibility of all bookings, discounts are correctly applied, policy adherence and that bookings count towards future negotiations.

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