Case Study #1
Client profile: A company in the food and beverage (F&B) industry spends approximately $3 million in overall hotel spend. The majority of employees stay at upper-upscale hotel brands.
Situation: Because the company emphasizes traveler satisfaction, there was limited opportunity to reduce costs by shifting employee bookings to lower-cost lodging tiers. Additionally, several company offices had pre-established relationships with hotel properties at the local level and there were commercial relationships between the company and a number of hotel brands.
Strategy and Solution: The hotelCONNEX sourcing team conducted an analysis of TMC data produced in the client’s primary and secondary markets at the property, brand, and chain levels. A strategy was developed that involved re-assessing savings opportunities at existing properties in the program and bringing in additional hotels in the same tier level (upper-upscale) based on employee travel patterns. After a bid list was developed and agreed upon with the client, critical negotiations started with the targeted properties in the client’s key destinations, supplemented by negotiations in secondary markets. In addition, the team focused on increasing the number of properties in brands where the company had existing commercial relationships.
Outcome: The Strategic Hotel Sourcing project yielded the client an ROI of 7:1.
Case Study #2
Client profile: A company in the banking industry spends approximately $18 million in overall hotel spend. The majority of employees stay at midscale and upper-midscale hotel brands.
Situation: As part of an overall initiative to reduce indirect procurement expenses, the travel department looked for opportunities to reduce hotel costs. However there was limited opportunity to shift hotel bookings to lower tier properties given that the majority of employees stay at midscale and upper midscale brands and the company has a strong focus on duty of care and traveler safety.
Strategy and Solution:The client engaged the hotelCONNEX sourcing team to analyze spend across several business units at all hotels – not just preexisting preferred hotels– to seek out opportunities to consolidate volume from different locations. In developing the strategy, the team worked with client stakeholders at different regional offices to assess the degree of opportunity to shift travelers to new properties not in the previous year’s hotel program. At the same time, the team assessed the actual and potential opportunity based on volume at viable midscale and upper midscale properties in order to pool hotel volume globally and enhance the company’s negotiation position. Once an overall property bid list was identified and finalized with each of the client’s stakeholders, the team implemented the RFP process until completion.
Outcome: The team identified savings by increasing the coverage of its program, yielding a ROI of 13:1.