RFP is complete, hotel rates loaded – now what? How do you measure how successful all that effort really is? And what’s the right yardstick?
According to Eric Jongeling, director of the hotel solutions group-Americas for CWT, corporate travel managers need to fine tune their key performance indicators based on the objectives of the program and in alignment with the corporate culture. Rate availability is critical to ensuring suppliers are living up to their commitments and monitoring realized savings, and compliance to the program is important for ensuring the program remains relevant to travelers.
The top two indicators for success, says Virginie Pouget, global head of consulting for Expedia, are the program’s average room rate evolution and the percentage of hotels booked through their TMC – and not directly through the hotel.
Travel managers are increasingly demanding prescriptive solutions, says Valerie Layman, chief product and services officer at Yapta. Adding layers and layers of more data onto mountains of existing data, she says, is too time consuming and not effective. Instead, the industry is headed toward the use of machine learning algorithms that can identify actions and opportunities at the point in time when they can actually be implemented, she advises.
To comprehensively evaluate the effectiveness of a hotel program, she says Yapta looks at the following areas: 1) supplier sourcing – are companies spending time with the right suppliers? 2) rate performance – how do booked and contract rates compare to industry benchmarks? 3) policy effectiveness and compliance – based on the potential savings shown through the data, are the right policies in place and how compliant are travelers to these policies? 4) rate tracking – as rates fluctuate between booking and check-in, is there confidence the company and the traveler are getting the best price?
There’s a real cost around incorrect data for corporations, says Suzanne Neufang, senior vice president-Americas for HRS. Hotel invoices are where a lot of auditors spend a lot of “excruciating” time, she says, but the better way is to catch incorrect data up front. The next set of innovations, Neufang predicts, will be around Level 3 data, which helps avoid incorrect rates in the first place.
TripBAM, according to CEO Steve Reynolds, has created its own category rate to help measure success: Lowest Qualified Rate. LQR is the rate the traveler would have booked if a negotiated rate was not available. Most companies use the BAR (best available rate) rate for comparison, Reynolds says, which is actually the highest rate that a traveler would pay. This rate overstates the actual savings achieved. In addition, companies considering a dynamic discount will compare the rate booked to LQR to determine the discount that is equal to their flat rate.
Reynolds says TriBAM’s Smart Share Shift solution can move 25 percent of a company’s volume into preferred hotels and away from “non-preferreds.” This gives the company more leverage over suppliers which means greater discounts in the future.Benchmarking As Best Practice
To ensure programs are up-to-date and always follows best practices, travel managers should also regularly benchmark their policies and allowance amounts against peers both within and outside their industry, advises Wes Bergstrom, vice president-global supplier relations for American Express Global Business Travel.
To assist customers, GBT recently launched Peer Travel Insights, a tool that lets travel managers benchmark their programs against a peer group of five to 20 companies across 40 key performance indicators – including dedicated hotel supplier optimization, hotel tier usage and traveler well-being metrics.
Instead of reconciling traveler data from multiple sources to learn about bookings made outside your hotel program, Scott Hyden, senior vice president and chief experience officer for RoomIT by CWT, maintains it’s better to prioritize the hotel attachment rate. This measures the percentage of air or rail bookings accompanied by hotel bookings. A low hotel attachment rate means a program may not be meeting traveler needs, or communication with travelers may need to improve.
April Bridgeman, managing director of Advito, agrees, saying adoption strongly correlates with satisfaction. Measures such as the Net Promoter Score (which measures travelers’ overall satisfaction and loyalty), are easier to obtain and track than many people think and can be valuable for travel managers. Surveys are also a good way to measure feedback, she notes, if you get enough responses distributed across demographics to fine tune your program to serve all traveler segments.
Travel managers should also measure their return on investment, says Bridgeman. She advises asking such questions as: How much effort does sourcing take and how does it relate to the savings you’re generating?
How does that relate to your adoption level?ROI isn’t going to come through large annual sourcing events with static rates, says Bridgeman. It comes through dynamic management of a program with ongoing monitoring and incremental improvements based on supplier, traveler and market changes throughout the year.
A high percentage of travelers booking hotels through their TMC could also be an indication of traveler satisfaction, says Pouget. That typically indicates travelers are able to find what they’re looking for, whether that’s a convenient location, free WiFi or complimentary breakfast.Satisfaction Not Guaranteed
Measuring overall guest satisfaction has also come into play in a more consistent fashion recently. For example, Reynolds says TripBAM works with TrustYou, a third party company to measure traveler sentiment for specific hotels. Companies use that score to offer only hotels that are high quality and source hotels that have high traveler satisfaction.
Hotel reviews are a great place to start, agrees Hyden. He says travel buyers will be able to see the hotel amenities and attributes travelers want, allowing them to learn about the hotels they should be partnering with. If properties aren’t meeting travelers’ needs, buyers can block them from programs or use the data to determine new lodging partnerships.
The Global Business Travel Association recently surveyed US business travelers and asked specifically about the importance of amenities when choosing a hotel for corporate travel. The resulting Hotel Business Traveler 2018 study listed the top five hotel amenities in order of importance: free WiFi, free parking, complimentary breakfast, loyalty points and early check-in.
However, amenities can be costly additions to a hotel program, cautions Layman, especially when they are not used. For example, parking is less important in New York City where travelers tend to take Uber or cabs, yet parking as an add-on amenity to rates is the most costly in the Big Apple. If travelers are booking rates with parking included at a higher cost, the value may not be there.
On the other hand, another survey of US and European business travelers found that some desired amenities are not always included in travel policy, says Hyden, leaving room for increased satisfaction. For example, food delivery services could be a boon to some exhausted travelers unimpressed with the room service menu, and offering in-room entertainment would allow travelers to kick back and unwind with a movie after a day of travel and business.
Tamara Laster, head of global transient sales for IHG, says corporate travel buyers have traditionally focused on cost and spend as key measurements to evaluate the performance of their program. Instead, she suggests focusing on building a traveler-centric program that supports overall business objectives and measures compliance to the program and holistic travel spend (inclusive of meals, transportation, etc.).
Since comfort and ease are important to corporate travelers, says Gabe Rizzi, president of Travel Leaders Corporate, his company places high value on amenities like airline and hotel room upgrades, additional leg room on the plane, and simplicity and speed in the rebooking process when on the road in the event of delays and cancellations.
Finally, Bridgeman says measuring traveler satisfaction with their digital experience is useful, since that’s how most travelers prefer to make bookings today. For instance, beyond feedback on how the trip went, how does the digital experience compare to the competition, especially in contrast to tools travelers have readily available to them in the leisure sector?
In the end, says Rizzi, “you want employees to represent your brand in an impactful way.” Companies should not want associates dreading a business trip or seeing it as a necessary evil. When companies’ travel programs help their travelers see corporate travel as a perk, says Rizzi, “they are far more likely to have satisfied workers who are dedicated to serving their customers.”