Global Technology Company's Quest for Hotel Compliance Pays Dividends

At A Glance

Industry: Industrials

Travel Spend: $135M USD

Travelers: 45,000

Challenge

Out-of-policy bookings led to overspend on hotel and risk of being underprepared in a crisis.

Solution

Educating employees on the importance of including a hotel reservation when they book a flight.
Identifying and measuring specific aspects of the program to make informed decisions.

Results

An estimated cost savings of $1.4M USD in 2017, thanks to greater usage of the company’s preferred hotel rates.
Better, more accessible traveler location and helping its travelers in an event of an emergency.

Results

The hard work paid off. Today, the client can claim a nearly 100 percent hotel compliance rate in the US and significant improvement in compliance around the world. This means that, excluding hotel stays for corporate meetings and events with room blocks, its employees stay in program almost every time they book in the US. This achievement represents an 18% increase in hotel attachment and an estimated cost savings of $1.4M USD in 2017.¹ What’s more, it means the client is better equipped to help its employees on the road by having more complete knowledge of their location.

American Express GBT and the client attribute the significant progress they made to the strength of the partnership and their shared willingness to try new approaches. Together, they continue to invest to achieve results and never stop looking for ways to improve.

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Challenge

As an American Express Global Business Travel (GBT) client looked for ways to tighten its travel program, one area ripe for improvement emerged: hotel. For every three overnight stays its employees were expensing, one was not booked through an approved company channel. These out-of-program reservations led to a dearth of itinerary data, which brought up questions the client struggled to answer: Was the company fulfilling its volume commitments to preferred hotel partners? Were employees obtaining the best available room rates?
And how could the company locate travelers in the event
of a crisis?

Opportunity

The upsides—both financial and legal—were clear. If it could solve for what it called the “black hole” of hotel booking data, the company could negotiate more effectively with suppliers, sharpen its forecasting, and be better prepared to take care
of the people who traveled on its behalf.

Solution

Together, the client and American Express GBT formulated a plan to close the data gap and take control of the hotel program. The keys to success would be twofold:

Communication – Educating employees on the importance of including a hotel reservation when they book a flight.

Data and reporting – Identifying and measuring specific aspects of the program to make informed decisions.

Communication

Targeted messaging:
By adding a reminder to include a hotel reservation when they book a flight to the online booking tool (OBT), the client was able to influence the traveler at a key point in the booking process.
Individual outreach:
By collecting a custom hotel reason code during online and offline travel bookings, the client was able to learn why travelers omitted a hotel reservation at the time of booking a flight. This extra data afforded the client not only valuable insights but also the chance for dialogue. Acceptable answers for not booking a hotel included “I’m attending a conference with a room block.” But where travelers answered, “I plan to book my hotel later,” the travel team would follow up individually to encourage timely booking. As a result, the client noticed an 11% increase in the number of travelers who went back to book their hotel.
Revising old patterns:
Out-of-program hotel booking was especially common for overseas travel. Because employees feared choosing the wrong place in an unfamiliar area, especially if they didn’t know the language, they’d often ask a colleague in the local office they were visiting to book a hotel for them. Through a group email communication, the client reinforced the value of travel arrangers’ local hotel recommendations and asked them to encourage those inquiring to make their own hotel reservations via the OBT or their local American Express GBT offline travel team.
Jumping on new rates:
Another chance to tighten up hotel spend came early each year when the client’s new preferred hotels program had been negotiated. Through reporting and outreach, American Express GBT and the client were able to capture the newly negotiated rates as soon as they were effective in two ways:
- First, they asked travelers with upcoming reservations with an “old” preferred hotel chain (booked during the previous year) to rebook with a current preferred hotel. Second, they asked new preferred vendors to adjust the billing for stays that took place between January 1 and the date that negotiated rates were finalized. Together, these simple but effective initiatives saved the client $50,000 USD in the first year.

Training:
With continuous growth and frequent acquisitions, there was an opportunity to teach employees who were new to the company’s travel program the right way to book from day one. The client took advantage, reinforcing the message to book hotel with each overnight air reservation during onboarding sessions and recurrent OBT trainings.

Data and Reporting

Metrics monitoring for the travel team:
In parallel to all the important outreach and messaging, American Express GBT measured success through quarterly business reviews and regular business plan updates. Armed with the average rate variance between preferred and non-preferred hotels as well as hotel channel compliance by region, the client’s travel team was able to quantify the opportunities available to them, make informed decisions, and validate its strategy for key stakeholders.
Reporting for business leaders:
The company’s financial leadership became part of the solution, too. American Express GBT provided recurrent reporting—like monthly summaries of hotel compliance and details of trips without hotels booked—so business unit and department heads had the information they needed to foster change among their employees. It was important to get the right reports to the right people for the biggest impact.

At A Glance

Challenge

Solution

Results

Results

Challenge

Opportunity

Solution

Communication

Data and Reporting

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