Technology is creating the hotel programs of the future – but the past is still present
Travel managers responsible for corporate hotel programs are working toward a more efficient and productive future while in many ways maintaining a status quo that is ripe for change. That future is one powered by technologies like machine learning and blockchain. Meanwhile, traditional ways of handling business travel remain stubbornly in place.
Result: Travel managers are boldly trying to incorporate changes where they can while continuing to operate within long-held practices.
In a recent paper on how technologies might affect business travel, BCD Travel offered many examples of how machine learning could impact business travel. In one model, if travelers like an alternative hotel, machine learning alerts travel managers that travelers are regularly using the alternative. Using “sentiment analysis,” the technology works out why they dislike the preferred hotel. Managers make travelers happy (and more productive as a result) and save money by negotiating a rate with the alternative hotel.
Similarly, according to BCD Travel, much-vaunted blockchain technology can help create self-regulating “smart” contracts where both parties are truly accountable. Clients will only get discounted rates once they’ve booked enough room nights and discounts will automatically be removed if not enough rooms are booked. Hotels will be automatically penalized for missing corporate rate availability targets.
While these enviable solutions and others are steadily creeping into the conversation, foundational processes continue. For one, hotel programs remain in many ways a volume-for-rate game. Scott Hyden, senior vice president and chief experience officer of RoomIt by CWT, says if companies can’t guarantee at least 150 room nights per year, suppliers aren’t going to offer double-digit discounts. Instead, companies may save somewhere around 6 percent.
And Brittany Taylor, program manager with 4D Travel, a division of the Flight Centre Group, says discussions for changes to the RFP process are constant but change is gradual. ”It’s a tedious six-month process for a year-long contract,” she says.RFP Reform
It’s no secret that suppliers are thinking differently about RFPs. At this stage, it’s not so much a case of whiz-bang technology but more about customizing programs to a company’s mission and goals.
Thinking about the process differently with clients, Kaplan notes, has resulted in tailored solutions for both large and small enterprises and win-win solutions that resulted in accounts more than doubling their savings.
Wendy Ferrill, global head of sales for Best Western, does not see a lot of change in the RFP process as many programs continue to use the GBTA format. However, she says, a number of travel buyers are taking a step back, evaluating their strategy and deciding what the desired outcomes are for their travel programs.
What can make the process easier are insights travel managers can provide into how their current travel programs are performing, with details like the ADR produced and performance at preferred hotels, overall hotel spend, and traveler booking behaviors, according to Virginie Pouget, director of global consulting for Egencia. She explains tools like the Egencia Analytics Studio make it quicker for travel managers to not only access this information, but also build their own negotiation strategies and prepare their supplier reviews throughout the year.Trumpeting Transparency
No enhancements to travel program processes are worthwhile if travel managers can’t easily see what’s going on. With a landscape that has become overly complicated and fragmented, transparency has emerged as a central mission for providers, according to Suzanne Neufang, vice president-Americas for HRS, the global hotel distribution company. For travel managers, she says that means knowing where a rate came from, whether it was used or suppressed and much more.
An important tool in achieving transparency, says Neufang, is a machine learning-supported rate filter introduced last year by HRS that eliminates the problem of “squatter rates” (where non-preferred hotels load rates into a system). Another factor enabling transparency is monitoring the process throughout the year, not just during one “painful” annual process. Managers can always see what is being saved, how bookings were made and whether it was a transient or a negotiated rate.Custom Fit
Another change: A one-size-fits-all travel program is a thing of the past. Hyden says each city and market is so different that it is important for travel managers to understand the individual market dynamics. Utilizing ADR predictions like the CWT/GBTA Forecast and tracking key metrics like occupancy rates play a significant role in understanding negotiation opportunities, Hyden notes.
“I’d also like to dispel the notion,” says Hyden, “that non-refundable rates can’t work. They can drive significant savings and the gains often outweigh a small percentage of cancellations.”
At Hyatt, the company works with each customer to design a travel program with customized offerings that are meaningful for travelers and meet the customer’s goals, according to Gus Vonderheide, vice president of global sales, Hyatt Sales Force. “Collaboration is key for Hyatt,” says Vonderheide, “and we find success when a company’s culture supports travel managers taking a similar approach.”
The focus on traveler satisfaction as an avenue toward higher productivity and greater employee retention is intensifying. According to a recent survey conducted by Hilton, 75 percent of young professionals consider travel a work perk. Furthermore, Vera Manoukian, senior vice president and global brand head at Hilton Hotels & Resorts says, the survey found 65 percent go so far as to view work travel as a status symbol and 80 percent said they can get more done in person.
As a result, Hilton launched a New Business Traveler initiative to respond to changing needs. For example, Manoukian says research showed nearly two-thirds of business travelers regularly pack workout gear but end up not using it. Hilton conceptualized Five Feet to Fitness, an in-room wellness concept that brings fitness equipment and accessories directly into the hotel room to help travelers maintain their workout schedules.
Similarly, Vonderheide says Hyatt has hired its first global head of wellbeing, and also convened a special customer task force to further understand what is important to their organizations from a health and wellness standpoint to inform programs and offers for travelers.
In fact, wellness is becoming a core emphasis for hotel programs. says Pouget, “Travel managers should also consider how a managed travel program will impact the broader company culture and find hotel partners that are best aligned with their culture and values.” For example, she says, if employees value health and wellness, it would be beneficial for the company to select hotel partners that offer free gym access and other fitness amenities that reinforce their corporate culture.
But the catering to traveler preferences extends well beyond wellness. Today’s business traveler, says Hyden, wants to book the same hotel they’d stay at if they were booking a leisure trip; they want to eat dinner at the buzzed-about restaurant they saw on reality TV and get around with the same easily-expensed rideshare model as they do in their home cities. Leisure booking channels, says Hyden, have not only done a great job attracting users with their visual appeal, but also by being incredibly easy to use. Managed travel programs have suffered by comparison.
Diane Laschet, head of Americas for AirPlus International, says travelers expect their business travel experiences to mirror their leisure lives. In this way, she says, hotels with a stronger social media presence will attract younger travelers especially who seek out properties they can learn about and interact with.Small Can Be Beautiful
Despite the increasing prevalence of travel management in corporations, many enterprises – especially small to medium-sized ones – still do not have a comprehensive travel program. Hotel companies have begun to respond to this.
Vonderheide says through Hyatt Leverage, eligible organizations are able to book directly on Hyatt.com and Hyatt Reservations Centers, and receive exclusive discounts at participating hotels. With this simple booking solution, program administrators have access to a dashboard that includes traveler information, reservations and room expenses, allowing organizations of all sizes to track total bookings and room spend.
IHG recently introduced IHG Business Edge. Kaplan explains the program is designed to enhance the corporate travel experience for SMEs, streamlining the negotiation process, honoring loyalty with rewards, and consolidating data, content and booking into one easily accessible customer portal.
“We knew,” says Kaplan, “that there was an unmet need for a travel buying program specifically designed for SMEs – a group of customers who can often be underserved by the industry.” He says customers told IHG a discount program alone is not compelling enough to drive their loyalty and engagement. “They didn’t want lengthy negotiations,” Kaplan says, “but rather a rich discount they could count on, reliable reporting and insight into the latest information, as well as access to a diverse corporate network of other, similar organizations.”
Centralized payment solutions (e.g. ghost/lodge cards or single-use virtual cards) can drive increased policy compliance while at the same time provide the most comprehensive travel transaction data a company can receive.Back to The Future
Even as evolutionary changes happen, technologies are becoming more a day-to-day presence. Tools like AI and blockchain, “feed into the self-service environment that travelers want,” says Neufang. Experiments are being done to make booking faster and raise traveler satisfaction. “It’s a matter of displaying three hotels rather than 300,” she says.
AI technologies that learn traveler patterns and predictable behavior would enable increased personalization of business trips, Laschet says. The negotiation process could change as technologies provide a depth of travel data that has never been seen before. This could completely change what types of questions and information will be required during the RFP process. “Both travel suppliers and corporate travel departments,” Laschet concludes, “will benefit from this advanced technology.”
So while managers look forward to another year of RFP negotiations, they can also rest assured that the future is coming fast and in the best case scenario will make life more efficient – and even more pleasant – for them and their travelers.