Travel buying continues to be a siloed affair, according to speakers on a webinar conducted by the Global Business Travel Association (GBTA) and HRS, the corporate hotel technology provider. Called “Mitigating 2024 Corporate Hotel Rate Increases via Segment Convergence,” the webinar featured Will Pinnell, managing director, the Americas, for the HRS Group; Makiko Barrett, senior director, procurement and travel at Automation Anywhere; and Shawn Parker, executive director, strategic accounts and corporate group sales at Hilton Hotels & Resorts.
According to Pinnell, more programs are negotiating with hotels for multiple products, segments and services (e.g., room nights, meeting space, room blocks, or extended stay) at the same time to truly showcase their cumulative value, an approach known as convergence. According to GBTA and HRS research issued last summer, most travel managers (54%) think their company would achieve greater process or savings efficiencies via convergence, while only 1 in 10 say they would not.
Despite those results, said Barrett, travel buying remains very siloed. She said she worked for a much larger company before her current role and handled only managed transient travel, while meeting planning fell under a different department. The two departments did not always work together, said Barrett, and shared no discussions of venue sourcing. She said mobility (ground transport) is also usually run from a different department as well.
Hoteliers, said Barrett, are not really excited about combining transient and meeting rates. Even large global organizations, she said, are frequently not successful at getting both transient and meeting rates sourced at the same time.
Parker said Hilton sees buying as more impactful at the chainwide level than at the individual hotel level. He added that negotiations are not just about rate but about total spending and moving market share. Discussions about convergence, said Parker, depend on the “maturity of relationships” and whether there is an “established trust” where a buyer has demonstrated a delivery on commitments.
Several polls of webinar participants were conducted during the event. They showed that 87% of travel buyers rarely or never consider convergence. A poll of hotel participants showed that 25% would be open to convergence, 25% would not and 50% would be open to it “in select scenarios.”
Another poll of all participants showed that the single greatest barrier to combining transient and meeting volume was internal purchasing silos at companies (48%), while other reasons were hotels not willing to do it (31%) and fragmented data about travel purchasing (30%).
