When it comes to heads in the beds, Phat Data can put to rest some insomnia-inducing problems in your lodging program
Discovering the hidden truths in your hotel data is typically more challenging than it should be. But applying your Phat Data strategy can reveal a treasure trove of negotiating power with your hotel partners.
It seems it would be so simple just to get the heads in beds. But the truth is that within the managed travel program the hotel category is rife with struggles. It is a complex eco-system that consists of corporate brands, franchisees, hotel management companies, online content, offline content – not to mention the managed travel program itself.
The multiple data sources cause complications and it seems like a never-ending challenge to find any source of truth in the data. But the fact is, as a travel buyer who has a Phat Data strategy firmly in place, you can start to chip away at the complexities and begin to get closer to the truth.
The easiest place to start is directly with your preferred hotel suppliers. Sharing your data strategy and goals for the hotel program is really important. This will ensure that your preferred suppliers are providing you with the most accurate and relevant data to support your specific program.
Buyers will need to understand exactly how the hotel tracks the revenue from an organization. And what happens when a traveler books outside of the managed travel channels, how is that tracked? What specific revenue items are being tracked towards total volumes? Is it just room and tax that’s tracked or does it include ancillary spend, such as meals, movies and bar charges? And what value does that bring to overall spend with a particular property?
These questions become impactful when a buyer is aggregating multiple sources of data: booking, corporate card and expense. If you are trying to come to the truth on the spend you have with one supplier, you will get vastly different answers depending on the source. So aligning with your supplier on what you can and can’t track through them makes all the difference in the world.
Once you can agree on what is obtainable from the suppliers, the buyer should begin the process of breaking down the spend. The first step in this is to take a look at the booking process. Whether you use a TMC or function as a CTD, the booked data becomes the initial foundation for obtaining your spend.
Fact or Fiction? Now the first thing to acknowledge is that this is least accurate data when it comes to the “all-in” of your spend. But even though this is the case, this data is critical to the mission. Obtaining the room rate for your preferred and non-preferred suppliers allows you to see the accuracy of the rates being booked.
Additionally, it’s important to identify program leakage, and understand how many of your travelers are not booking hotels through your approved channels. These items lead to serious discrepancies between the data that you believe to be accurate versus what the hotel may be tracking. It can impact your ability to negotiate rates and leverage all your spend. But on a positive note it can help you find where there are problems within your managed travel program.
The second step in seeking the truth about your hotel spend is looking at the data through your corporate card, expense tool or both. Once you begin to access spend data rather than booked data the hotel spend picture begins to come into focus. Buyers can now see how the leakage occurred and where the gaps in the program are.
By taking the corporate card data into account, buyers can now spot what properties are being utilized both inside and outside their program. And if you can gain Level 3 data from your corporate card, more power to ya! An expense system that requires hotel stays to be broken down by spend type (room, tax, meal, parking, etc.) helps to gain clearer understanding. Additionally, it allows insight into what other types of spend are happening during a traveler’s stay. The managed travel program is suddenly shown more hotel-related data than ever before.
There is another area that can provide both cost savings and valuable data for the managed travel hotel program. If your TMC or you as a corporation are using a re-shopper tool, it adds a third level of data to the program. These are tools that continually shop for lower rates at same or similar properties. The data they generate can highlight and deliver real savings opportunities. And that’s the kind of data that is truly Phat!
Using such tools provides a way to ensure your travelers are obtaining the best rate available from the time they book to the day of arrival. The savings are captured and reported back to the travel buyer. Furthermore the information can be utilized strategically when it comes to managing and negotiating your hotel program. If you are not currently utilizing a re-shopper, it may be worthwhile to inquire about the products in the marketplace and determine if there is a fit for your program.
Negotiating Levers Now that you have started to gain clarity around your hotel program, how does all this Phat Data enhance your negotiating power as the buyer? There are three areas of focus.
Rate parity is first and foremost when it comes to negotiating with your preferred suppliers. Buyers now have greater insight into those instances when the corporate rate is being undercut either by external sources or hotel inventory controls. When this kind of activity is uncovered, it is important that buyers are getting credit for every head in every bed that company is sponsoring.
Which takes us back to the notion of tracking the booked data; buyers must know how reservations are being tracked at the hotel level. This Phat Data changes the conversation between buyer and supplier. Buyers need to understand why a hotel provider is offering less expensive rates and how the hotel will honor any lower prices that enter the market for that hotel, even if the stay is booked under a corporate rate. It’s a new conversation.
The second item is program leakage. When a buyer identifies the truth about program leakage, they are able to do two things. One, focus on travelers that aren’t booking within the managed channels and educate them on the benefits. Two, figure out which properties these travelers are booking and determine how they fit into the program, if at all. Taking those out-of-program nights into consideration when sitting down at the negotiating table could drive significant results in leveraging your total spend.
The third area of consideration is whether or not you even need to go through all these RFP shenanigans and rounds of negotiations with hoteliers. Now that you have all this Phat Data, might it tell you that a more dynamic, city cap, re-shopper type program delivers better overall results?
Applying Phat Data strategies will allow buyers to gain better insight into their programs. At the same time, suppliers should have a more fruitful relationship with the managed travel program. Getting those heads in beds shouldn’t be so difficult and with the right focus it can be a win-win-win for the buyer, supplier and traveler.
If you haven’t started developing your Phat Data strategy, what are you waiting for? The time is now!
Jennifer Steinke is vice president Global Travel Experience at WHoldings, and an industry thought leader with over 27 years experience managing corporate travel. She holds an MBA plus Certified Corporate Travel Executive (CCTE) and Global Travel Professional (GTP) certifications from GBTA. Jennifer strives to deliver innovative and thought provoking ideas to the corporate travel industry.