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| February 25, 2010 | Hotel study indicates significant losses from unmanaged programs | | New Delhi: Significant losses are expected from unmanaged hotel
programs, a global study of hotels conducted by Egencia, an Expedia Inc. company, has revealed. Titled 'Hotel Cost Control: Savings and Opportunities', the study
finds that companies risk tremendous annual budget losses through unmanaged travel
activity. Pairing insight from corporate travelers, travel executives and real-world
travel programs, the study has also examined common areas of loss, ways to prevent
leakage and emerging opportunities for cost savings in an effort to establish
industry best practices. "Delivering knowledge and insight to the industry is
a key part of Egencia's mission," said Cecilia Routledge, Managing Director
Asia-Pacific
and Head of Global Business Development. "To educate businesses to better
understand
the opportunities available through proactive policy management and cost control,
we invested in a dedicated study that delivers powerful information," she added.
A global survey of 433 travel executives has revealed missed opportunities for
corporations managing hotel spend, including 30 percent of them saying their
companies
did not have a hotel policy in place. Supporting data confirms other gaps, including:
65 percent do not have city-specific hotel per diems; 33 percent using expense
reporting to monitor compliance; 34 percent requiring pre-trip approval to monitor
compliance; 32 percent proactively informing all employees who book travel of
the policy for compliance; 29 percent verbally reprimanding those who book out
of policy, 12 percent sending e-mail notification to those who book out of policy;
and 12 percent not enforcing compliance at all. According to Egencia, these statistics
are significant because defining hotel per diems by city or actively enforcing
a policy once in place can help make a travel program more fiscally sound. Likewise,
requiring pre-trip approval can also boost compliance and deter unnecessary
spending
by palpable amounts. "Oversight and policy management are two important strategies
which yield strong returns for travel buyers. They offer the opportunity to capture
valuable data and reporting and help immensely with negotiating discounts and
amenities like those we offer through the Egencia Preferred Rate program," said
Routledge. This issue was further underscored by the results of a global survey
of 1,000 travelers and arrangers. Fifty-five percent of those that responded noted
that their company does not enforce or simply encourages them to follow a hotel
policy. Thirty-two percent said their company does not have a hotel policy at
all. The "Hotel Cost Control" study also took a deeper look at the benefits of
proactive policy management and reducing leakage. For example, for Egencia clients
with an average travel spend of 15 million dollars or more, those actively enforcing
policy savings saved roughly 17 percent on average daily rates (ADR) versus those
companies that do not enforce hotel policy. The study has also examined topics
such as preferred supplier strategy and negotiation; managing change within your
organization; monitoring and policy oversight and benefits of mandating In its
2010 Forecast and Hotel Negotiability Index, Egencia found that hotels represented
fertile ground for buyers to negotiate better rates and realize travel cost savings.
To address this issue indepth, Egencia will come out with a free White Paper to
be made available on its web site www.egencia.co.in | |
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