Sourcing Travel Accommodations part IV of IV!

April 20th, 2012

This week’s blog series has been by Mark Davis; Sr. Vice President of Operations and CTO at SafeSourcing.

Ok, amenities are one thing, but how data relative to individual locations, chain or corporate discounts and rebate programs interact is key to making sure that what looks like value really is.

During Part III of this post we discussed organizing your data and looking at amenities offerings and programs that when supported by your corporate travel policies drive value and assist in establishing the goals for your event.

Today we will be exploring the importance of these additional data elements.

   1. Location Rates
   2. Chain Discounts
   3. Rebate Programs

The Location rate – The most ideal scenario in any accommodations eProcurement process is to negotiate the rate at individual properties based on a spend estimate (usually more than 100 nights a year).  Regardless of what the goal of the project eventually ends up being, being able to focus on the top 8-10 locations where you have significant recurring use  to reduce your rates is something that should be considered as long as you have the estimates to provide the properties; which is not always the case. There are ways to extrapolate this data if it is not yet consolidated that a solutions provider should be able to help you with.

The Chain or Corporate Discount – In many cases, company’s lack the visibility into their accommodation spend to be able to let vendors know much more than the overall amount they spend each year.   There are times in these cases, when a company is beginning to establish its travel policy and tracking mechanism that trying to get a chain discount across all properties may be a good place to start.  Selecting 2 or 3 preferred chains will help you get a good discount and will provide you with partners who can begin helping you track the activity from their side as well.

The Rebate Program – Unfortunately when you can’t provide the level of detail you want to the vendors on the portion of business they stand to gain while at the same time you may even be starting a new travel policy program internally; getting everyone to commit to the project can be difficult.  The vendors don’t want to go out on a limb because they don’t know how much business they are really going to get and the employees may not follow the process because they see no reason to do so.

Establishing an annual cash rebate program with the vendors based on volumes can address both of these issues.  Vendors have the opportunity to commit to additional savings when they get the volume of spend they are seeking and since tracking volume becomes the means by which this rebate is achieved, the employees and company have a strong reason to maintain use of the new processes.

If you do have good consolidated information, there are ways to leverage all three of these data elements in order to optimize your savings opportunities and reward your frequent travelers and traveling vendors at the same time.

Hopefully this four part blog series points out that there are a number of variables (data) to consider when sourcing Hotel Accommodations, individually they all can add value and potentially reduce costs or mitigate increases, combined as a complete strategy where each element is leveraged there is significant potential  for your company.

If you’ve enjoyed this four part post on sourcing accommodations, please pass it on to others that may have interest. If you like more information about sourcing travel related categories like hotel accommodations; please contact a SafeSourcing Customer Service Representative.

We look forward to and appreciate your comments

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