Though different in certain aspects, hotel category management in both the commercial and government sectors face similar challenges in striving for the shared goal of reducing program costs for travel managers and travelers. In a recent survey conducted by GBTA and RoomIt, travel buyers have identified their top goals of 2019 as reducing program costs and increasing policy compliance.
While commercial organizations and Federal Government entities share the same ultimate goal, the survey uncovered some disparity between how travelers and travel managers approach controlling program costs, increasing compliance and improving traveler satisfaction. At the recent GovTravels conference, results of the survey were presented, generating lively discussion amongst the participants about some of the common challenges all organizations face when trying to manage the hotel category. Below are some highlights from the findings.
When it comes to the goal of savings, travel buyers and travelers often differ in their approach to booking and view potential savings. Travel managers are not looking at savings rate-by-rate, but instead focus on overall compliance. Travelers, however, feel that they can find better rates on their own, which ultimately increases costs by diluting negotiating power and the advantage of flexibility and benefits available when booking the organizations desired hotels through official channels. Education is necessary to ensure that travelers follow the correct path to booking the correct hotel rates.
With this in mind, there are ways to bridge the gap between the goals of travel buyers and travelers by considering the factors that lead to booking outside of approved channels. Some of these reasons include, but are not limited to:
1. Lack of availability of lower rates at or below per diem within approved channels
2. Ease of finding a hotel close to their destination
3. Perception of availability
4. Travelers don’t have a clear understanding of what is in policy
5. Preferred hotels are outside of policy, so they cannot earn loyalty points
Enforcing policy compliance is the most challenging and important aspect of managing a hotel program. When travelers book outside of the approved channels, it becomes difficult to determine if hotel spend has been optimized. This also raises an issue in negotiating participation in hotel programs.
Not surprisingly, in the commercial sector, the survey uncovered that travelers feel that they are more compliant than they truly are. Government travel managers face similar compliance challenges as well. For example, a high percentage of hotel bookings are currently made outside of official government channels. This a travel manager’s visibility and ability to manage this spend category. Travelers from both sectors claim that challenges in finding hotel availability create the need to book outside of preferred channels. However, further investigation shows that rates are available through official channels, just not at the hotel a traveler may prefer which drives the non-compliance.
To improve compliance in the commercial sector, one innovative solution is to offer hotel loyalty points when travelers book the right rate, at the right hotel, through the preferred channel. Current laws and regulations prevent this type of solution from being deployed in the government sector, meaning that travel managers may need to get more creative to help improve compliance.
In reviewing the survey results, there are many more similarities than differences in the challenges travel managers face in managing the hotel category in both the Government and Commercial sectors. The gaps in how travel managers and travelers view the same problem exist across the board. Because the sectors are more similar than different, there is much that can be learned by sharing best practices and strategies. Although not a ground-breaking solution, continual education and training is the foundation for a strong program. Travel managers need to be transparent with travelers on program objectives and requirements.