When hotel negotiating season rolls around, more than at any other time, data is king. And the numbers that really count are more than just heads in the beds; the travel patterns revealed in the data you mine can be solid gold for both you and your hotel partners.
As we find ourselves in the throes of hotel RFP season, there are new entrants into the marketplace that are influencing the data and the processes for analyzing the hotel spend category. These influencers can be game changers for the hotel suppliers, the travel buyers and the travelers themselves. From re-pricing technology to long term stay to Airbnb, the landscape for hotel spend is changing and travel buyers need to embrace these changes to deliver a holistic overnight stay program that satisfies a variety of different travelers. So how can Phat Data help?
First and foremost, what’s your strategy? Are you continuing to take the number of nights in a city, location, amenities and allowing that to drive your preferred hotel program? That is certainly a fantastic place to start. But now let’s take a deeper dive into additional data that you can use, not just to develop a preferred hotel program but to create an ‘away from home’ program.
Among of the biggest influencers in the hotel space are products like Yapta and TripBam. These services constantly search for lower rates and rebook rooms when those lower rates are found; in the process they are driving down costs and driving up questions about how a buyer manages the mix between their corporate rates and the lower rates that come into the market.
Let’s face it; one of the greatest challenges for the managed travel program is travelers who are constantly finding hotel rates lower than the company’s negotiated rates. These re-pricing services help combat that. But in the buyer’s mind, it begs to question, Why are my negotiated rates constantly are being undercut by my preferred partners?
More and more buyers are taking the data from these products and moving their hotel program from an annual negotiation process to a more dynamic process. In this scenario, the negotiated rates may change on a frequent basis depending on what the market data shows as the best rates for a period of time. If the negotiated rate is $189 per night and services like Yapta and Tripbam are consistently finding lower rates, it’s time to renegotiate that preferred rate to meet what the market is bearing at the time.
Buyers need to be in touch with this data on a regular basis and begin to manage their hotel program not on an annual basis but on a quarterly or even monthly basis. It is a new data set and it is Phat! Oh, and there is one more Phat benefit to these services: It helps reduce program leakage by guaranteeing to your travelers that your program will find the lowest hotel rates. That will put a stop to the ‘stump the chump’ conversations.
Blurring the Lines Now we move from heads in beds to people in homes. The industry is certainly seeing an uptick in long term stay properties for transient travelers and an increased usage and acceptance of Airbnb in managed travel programs. Recently at the GBTA convention, we heard from hotel chains that are investing in private homes as a way to add to their traditional hotel room offerings.
More and more corporate travelers, especially Millennials, are looking for a less traditional hotel experience, wanting to live more like locals and enjoy the amenities of an at-home experience. As Airbnb focuses on growing their corporate business, we are seeing more amenities in these properties you’d expect to find in hotels (think: shampoo, bottled water). The lines are blurring, so it is probably in the best interest of travel buyers to focus on the data that can be obtained from these types of rentals to evaluate how they can be included in the overall overnight stay program. There is still a lot of due diligence that a corporation needs to consider when adding these types of accommodations, but ignoring them is certainly not the answer.
This also goes for travelers using traditional long term stay properties for transient travel stays under five nights. Many travelers tout their desire to utilize these properties to provide flexibility to cook their own meals, eat healthier, and relax in a more comfortable environment and still have hotel amenities. After all, who doesn’t want to lay on the couch and watch TV, just like home?
It’s important for travel buyers to get a read on how much under-five-nights long term stay is being used and capture the data. From this they can determine two things. First, how much impact it is having on their hotel program, diverting stays from the preferred properties? And second, how can you add these types of properties into your program and still keep room night obligations in your markets? One possibility is to consider a chain-wide agreement with a long term stay chain. Another way is to look inside the brands currently in your program and add properties with dynamic rates, so you can offer both type of properties from a specific brand.
Data reigns supreme here. If you already have long term stay properties in your portfolio, have the brands provide you with the data on under five nights and consider how that may affect your overall transient room nights in a market. Now you add Airbnb into the mix and you may be negotiating your hotel program with an entirely new set of Phat Data. Finally, and maybe most important, consider the traveler’s experience. Long gone are the days when we just negotiated rates and pushed our travelers into what we thought was best for them and the company. Our travelers are more brand loyal, more experience driven, and less likely to just accept Property X.
Hotel companies are using the massive amounts of data they collect to enhance the traveler experience and drive brand loyalty. Understanding that the demands of business travel differ from leisure travel, chains are even changing room configurations to better accommodate corporate travelers. Hoteliers are also looking at the lifetime value of a traveler and knowing that a one-time vacationer, while important, doesn’t drive nearly as much to the bottom line. So they go the extra mile to keep their repeat corporate customers coming back.
Now combine what the hoteliers know about our travelers and what we know about balancing both cost savings and traveler experience, we can take that mountain of data and transform it from merely Big to Phat!
It’s not your same old preferred hotel program anymore, so stop sourcing it like it is. Take big bites out of overnight stays and use Phat Data to help you build a hotel sourcing initiative that your travelers will think was developed just for them as an individual. Happy travelers make compliant travelers, and compliant travelers deliver cost savings!
Jennifer Steinke is manager, corporate travel for Dycom Industries, and an industry thought leader with over 27 years experience managing corporate travel. She holds an MBA plus Certified Corporate Travel Executive (CCTE) and Global Travel Professional (GTP) certifications from GBTA. Jennifer strives to deliver innovative and thought provoking ideas to the corporate travel industry.