Thinking local when going global is key to a hotel program that can work anywhere on the planet
When it comes to designing a hotel program that includes hotels outside the US, the best policy may be to revisit the classic adage: “Think global, act local.” And that usually means thinking beyond the usual channels – independent properties and creative solutions.
The ability to leverage global hotel relationships and weave them into a global hotel policy, is definitely a key component of designing a strong global travel program. Lodging
Lexi Benakis, director of sourcing consulting in the Americas for HRS, notes for US-based programs that travel to major overseas destinations, it’s important to leverage global usage for maximum discounts. In overseas destinations, there are typically independent hotel options that often will provide compelling rates and flexibility to win corporate business.
“The ‘act local’ element is vital for understanding any regional items that could impact the choice of hotel,” she says. “Having a credible source on the ground – either a co-worker or a local hotel expert – can go a long way toward ensuring the selection of properties that fit into a global program.”
Alison Guilbeaux, director of business analytics at Yapta, notes thinking global but acting local is the key to leveraging global spend while incorporating local needs to support the overall hotel program. “Also, the local office intel combined with global spend data can provide valuable insights for negotiations and quality assurance which drives supplier compliance,” she says.
Kelly Phillips, senior vice president sales, customer engagement and industry relations at Hilton, says the most successful hotel programs that she’s seen take a global approach from the onset.
“For instance, we recommend that companies submit one unified global RFP instead of each region managing separate processes,” she says. “We’ve seen widespread success with this approach from our side because it streamlines communication and makes it more efficient to align colleagues around the world with the right buyers and decision-makers. It also allows the global travel manager to leverage their local expertise to address region-specific needs.”
As it relates to the evolution of global hotel programs, Hilton has seen a significant increase in the interest and demand for tiered pricing over the last decade, whether that’s static, dynamic or a combination of the two. The company has also seen a shift to focusing more on compliance.
“Additionally, we are aware that travelers are becoming much more tech-savvy, which is why we’ve focused on innovation to help differentiate ourselves in the digital space and address this evolution,” Phillips says. “To that point, the secret for success in today’s business environment is fairly simple: Listen and then act. At Hilton, for instance, we’ve been testing and improving our dynamic pricing model for nearly a decade, and it’s evolved based on real-time feedback from our travel buyer partners. We understand there’s not a one-size-fits all solution to most challenges.”
Steve Reynolds, CEO of Tripbam, says things are done differently in Europe and other parts of the world, because there’s not as much chain dominance. Additionally, in Europe, it’s more common that companies have separate travel agencies for car and rail and the hotel.
“You just have to have more property level discounts, and you have to have a static rate with hundreds of hotels if you really want to cover a significant amount of your spend,” Reynolds says. “We’re big believers that the more property level discounts you have, the more money you’re going to save, period. I don’t care how good a chain-wide discount you have, you’re always going to get a better deal if you do something at a property level, and our analytics and reporting have proven that out.”
Laura Kusto, senior director and global lead of spend management consulting and dynamic sourcing for BCD Travel, says outside the US, the company still leverages the same strategies as within the US, looking at a client’s total spend and the markets where they’re traveling.
“Their top markets tend to have what we would put in place, which would be more of a static rate strategy where they have a lot of leverage – a lot of spending power in the market,” she says. “They probably have some really great relationships already in place with the hotels in those markets. Then in the secondary markets is where we look to dynamic rates to fill the gap.”Enticing the Business Traveler
A savvy global plan will have features that attract the business traveler, so this is an area that hotels spend a lot of time and effort on. For instance, one of the top concerns with travelers is security, Benakis notes, as travelers going to a new market in a new country will always value their safety.
“Travel buyers also need to be mindful of their duty of care obligations and their traveler personas,” she says. “Do you have women traveling alone? Have there been any reported incidents at that specific hotel? These are considerations that must be accounted for.”
The proximity to the office/work location/client they are visiting is also vital. Travelers value their time on the road and they’ll almost always prefer their hotel to be close to where they need to be.
In fact, 92 percent of travelers surveyed by GBTA in research released in July 2019 said that proximity to their work engagement was the No. 1 factor when choosing a hotel. Having preferred hotels with a negotiated price that is close to the work engagement can also drive up hotel compliance.
“Hotel amenities and proximity to dining and other local attractions are also factors that can drive hotel selection by travelers and travel arrangers,” Benakis says.
Virtual payment acceptance is another factor that registers high on the priority list for both travelers and travel buyers. “It is one less opportunity for identity theft or fraud for the company and improves the traveler experience, especially when traveling outside of the US,” Benakis says. “Lastly, virtual and centralized payment options are growing in use, as companies are making the correlation between more streamlined/simple hotel payment and increased preferred hotel usage.”
Reynolds notes by minimizing expense reporting hassles and expediting check-in and check-out, mature global programs effectively steer more travelers to use the most efficient booking paths and in-policy hotels.
Enticing business travelers can be challenging due to some travel policies, Guilbeaux says. However, most programs that incentivize travelers are generally more successful. “Plans should include leveraging loyalty programs, include hotels that are convenient and well-equipped,” she says. “Also, some buyers may use a communication plan to gamify ‘good behavior.’”
Phillips notes hotel program plans should anticipate business travelers’ needs, reward their loyalty, and help them remain compliant to company policies. “At Hilton, we work with our partners to provide a seamless booking experience, transparent pricing and flexibility and ensure the overall experience includes perks that are personalized and don’t require travelers to disrupt their normal routines,” she says.
Kusto says a really good buyer/hotelier relationship goes beyond negotiating the program; it involves setting target rates, giving the travelers logical guidelines, and then really focusing on their user experience.
“Travelers are individual consumers. I think that travel managers don’t always think about that, but they’re buying things in their everyday lives on the Internet, and a lot of times today, on their mobile apps, and so they have a level of expectation when it comes to quality, ease of use, and sophistication with the technology and how the rates are being presented,” Kusto says.
“When the corporate booking channels don’t meet or exceed what they’re used to in their everyday life, it really diminishes their confidence in the tool and their ability to trust the program,” she cautions. “Those are the things travel managers need to focus on in addition to sourcing the rates.”A Winning Strategy
Most global hotel programs have evolved over time with the availability of more information, local market inclusion and better communication. Companies are increasingly leveraging data for more accurate insights on their program, including both historic and predictive analysis.
That’s why Benakis notes it’s important to examine a program’s history, get accurate totals on past room nights in overseas destinations with the most volume, then bake in projections for the future. “Do you anticipate increasing room nights in a given destination by 10 percent? 20 percent? Are you adding a new destination, and how many room nights do you anticipate there? Take into account market trends and forecasts and any major events,” she says.
Next, Benakis advises leveraging your on-the-ground resources. Which business-grade properties are closest to your end destination (i.e. a regional corporate office, the offices/factory of a key client or partner, etc.)? Are those properties tied to any chains you might use in other locations, giving an opportunity to leverage volume across continents?
If the best property option are independents or a part of a small regional group – a likelihood outside of the US, where more than 70 percent of hotels are not chain-affiliated – find out from a reputable local source if the service levels are appropriate and pricing is competitive.
“It is also critical to ensure that you are incorporating a safety and security rating or component into your evaluation and collaborating with any internal security teams for alignment,” Benakis says. “Corporations who outsource hotel sourcing to entities with widespread, on-the-ground expertise can typically gain this insight in an expeditious manner.”
Guilbeaux believes designing a comprehensive global hotel program requires a strategic development plan, including program launch and a TMC execution. “Incorporate local hotel leads at key locations, solicit feedback from business units and travelers driving market volume, and assess nuances, conditions, and supplier intel that may not be gleaned from travel spend data,” she says. “Define strategies and create targets to align with program goals including savings, safety, and supplier partnerships.”
Once concluded, she suggests that the findings, including the hotel RFP solicitation list, be communicated and feedback be incorporated to gain mutual buy-in on the goals and acceptance criteria. “Upon acceptance, share approved suppliers, create a communication plan and keep the program fluid,” Guilbeaux says. “It is key that all location partners understand they own the success of the program.”
The takeaway from hotel experts is that when designing a global program, it’s important to take a strategic look at the full global ask for the company – but then execute on a local scale. “We want to ensure that customers have the same pricing flexibility and seamless booking experience in all regions no matter which booking tools or travel management companies they use,” Phillips says. “The global RFP makes this possible and ultimately results in higher traveler satisfaction.”