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Reduction of total travel cost

Standards for cost reduction put travel managers under pressure: how can they create a hotel programme to stay within the set price limit?

The challenge of reducing costs

Reducing direct and indirect expenditure is one the biggest challenges of travel management. The pressure to remain within the set price limits can be high for travel management as standards for saving costs are passed onto the person responsible for travel. At the same time, the travellers expect adequate hotels for their business trips, which puts the travel manager under pressure from both sides.

Providing a global hotel programme

For a cost-efficient hotel programme, a comprehensive offer within the set price limit is the key. In practice, a too small hotel selection in the predefined Rate Caps is available to the travel manager, especially for high price destinations. This is, for one reason amongst others, caused by the fact that many companies focus on a few big hotel chains that are only a small part of the whole hotel market in most of the regions – and they therefore pay a comparatively high price. Furthermore, they are often lacking benchmark data for a realistic assessment of their tariff and also local market expertise in order to achieve the best negotiation results.

Individual hotels: potential often remains unused

Chain hotels normally have comparatively high overhead costs so that they have, on average, higher prices per night than independent hotels. As a consequence, this also means that there is less room for negotiation for cost reductions. However, it is difficult for companies to reach independent hotels: the market is fragmented and negotiations with individual hotels would be too time consuming. The amount of independent  hotels dominates almost everywhere in the world, though. The industry of independent hotels is also underrepresented in the Global Distri-bution Systems (GDS) in many regions. Due to a lack of resources, companies often resort to hotel chains. This way, the potential for savings savings potential and the better locations of independent hotels remain for the most part untapped.

Missing resources for efficient hotel procurement

For a structured analysis of current travel behaviour and systematic negotiations with hotels within the framework of hotel procurement, it is simply time that is lacking for most companies. In addition, missing benchmark data weaken the negotiation position. Possible potential savings caused by structured negotiated rates remain unused.

The solution: HRS provides holistic support

HRS - Corporate Savings Dashboard

With the comprehensive HRS hotel portfolio, detailed benchmark data as well as consulting and local market knowhow, you find the perfect hotel programme in your relevant business destinations. Both the savings potentials that have already been achieved and those of the future are shown in detailed analyses. At the same time, you profit from the best conditions: with Intelligent Sourcing, HRS supports you from the strategy to rate negotiations up to the rate audit, thus revealing enormous savings potentials to you. You have full transparency of the realised Cost Savings at all times.