News

MILLIONS LOST IN POOR NEGOTIATIONS SAY LEADING TMCs

MISMANAGED HOTEL PROGRAMMES are costing corporates millions of dollars every year, according to two of the world's top business travel companies.

American Express puts the accommodation overspend at US$500 million, while Carlson Wagonlit's Travel Management Institute reckons companies could easily cut hotel bills by more than 20 per cent per annum.

Both TMCs say corporates' failure to forge preferred supplier deals and then to enforce policy compliance are the key factors behind the profligacy, and Amex is even offering companies free hotel programme health checks to help slash spending.

American Express' vice-president and general manager of global advisory services, Hervé Sedky, says an average of 22 per cent of company hotel bookings are made outside company policy. Preferred supplier programmes could save another 15 per cent.

Amex also reckons 40 per cent of air bookings for business trips involving hotel stays do not incorporate the room reservation - companies are booking flights and hotels separately, doubling their booking fees. "Negotiating discounted hotel rates is only one aspect of strategically managing this T&E category. Companies also need to focus more on improving traveller compliance," Sedky says. "Companies of all sizes have the potential to drive a significant piece of revenue back to the bottom line." Christophe Renard, Carlson Wagonlit's vice-president, business intelligence, says the complexity of the hotel market necessitates a methodical approach.

"There are more than 250,000 chain hotels and independent properties that service corporate travellers worldwide," he says. "Pricing is complex and rates may vary depending on the day of the week, the season, and/or the economic conditions in a particular market."