Hotel Procurement: Travel Managers Balance Administration, Costs, and the Employee Experience

The job of a corporate travel manager only becomes more interesting. On one hand, they have their organization’s travel policy and budget which usually dictates efficiency and low costs. On the other hand, they have their business traveler, a savvy consumer when out of the office with their own set of personalized needs, which tend to favor efficiency and cost-savings. Yet the travel manager’s hotel booking process doesn’t necessarily create a win-win, because in today’s marketplace, there are many competing players playing for a range of buyers. They’re part of a complicated ecosystem.

Let’s take a look at how the corporate travel manager’s priorities are so often at odds:

Administration and Costs

Recent research from the Association of Corporate Travel Executives (ACTE) and Global Hotel Solutions (GHS), shown in Strategic Hotel Sourcing Priorities for Corporations, unveils the top challenges faced by the business travel managers in global hotel procurement. For those surveyed, the complexities of hotel sourcing, especially without the help of a third party, include:

• Rising hotel prices (53%)
• Time and manpower commitments associated with hotel negotiations (40%)
• Slow or unresponsive hotels (35%)
• Lack of standard bidding processes (18%)

While these survey results explain why many corporations outsource hotel sourcing, they paint a clear picture of what makes dealing with hotel bookings a process that can leave little to be desired without the right resources or access to the “right” channels. The bottom line is time and money, administrative and cost concerns. See Book Hotels Smarter with Virtual Cards to explore more on the topic of bookings and costs.

Hotels and OTAs have been in a battle over bookings, making the cost/sourcing issue for corporate travel managers even more convoluted. How can they find the best price? Can they use their current systems to book? Are the buyers and suppliers essentially at odds? These challenges are covered in BusinessTravelNews.com’s The Hotel Industry’s New Direct-Booking Discounts, which notes that major hoteliers are now offering discounted rates for loyalty members who book directly on the brands’ websites or mobile apps rather than through the GDS. It’s a matter of time before there’s resolution on this matter, as the market share for corporate travel is too large to become a casualty in the OTA/brand booking war.

Experience

Companies want to address their traveler’s needs in order to enhance their job satisfaction and retain top talent. Yet meeting these needs in a consumer-centric (not business-centric) world of travel doesn’t come easy for most corporate travel managers. In fact, it might be making their job more difficult when it comes to administration and costs.

Skift’s Corporate Travel Programs: Bringing Business Travelers Back In discusses how the corporate travel industry has struggled to meet traveler expectations, while consumer-facing OTAs have successfully delivered stellar experience to leisure travelers, thanks to top-notch functionality and user-friendly web interfaces. They explain how the relative lack of experience “delivery” has prompted more business travelers to book out of policy and outside of approved booking channels. Learn more in Travel 2.0: The Basics of Open Booking.

In response to this trend, companies like BCD Travel’s TripSource Hotels, as noted in the Skift article, offer a “consumer-grade user experience that factors in all the complex rules associated with a corporate travel program,” providing the type of experience business travelers are looking for. Good news for many corporate travel managers whose companies are willing to consider innovative sourcing solutions.

For additional insights, read What’s New in Corporate Business Traveler Booking?

Even so, the ACTE and GHS survey showed that most buyers “turn a blind eye to the traveler experience,” as indicated by these results:

• Only 42% of corporations track traveler experiences about hotels (and where they do, the focus is on the choice of hotels, and not on traveler satisfaction with processes)
• One-third of the corporations who track traveler experiences have no formal mechanisms to capture feedback about hotels

There’s hope for the future, as recently explored in Meeting the Needs of Your Company’s Business Travelers Starts with Communication and Feedback. Travel managers are edging in on the employee experience and looking for ways to put the traveler’s satisfaction at the center of the booking process. In time, the industry is likely to right itself and bring corporate travel managers flexible solutions that make it easier for them to balance the demands of the company and the traveler, which, while not always in conflict, aren’t always so easy to bring into perfect alignment when booking hotel stays.