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The challenge of reducing costs

Standards for cost reduction put Travel Managers under pressure: how can they create a hotel program to stay within the set price limit?

The challenge of reducing costs

Reducing direct and indirect expenditure is one of the biggest challenges of Travel Management. The pressure to remain within the set price limits can be high for Travel Management because standards for cost savings are set from top management and passed to the travel department. At the same time, the travelers expect adequate hotels for their business trips, which puts the Travel Manager under pressure from both sides.

Providing a global hotel program

For a cost-efficient hotel program, a comprehensive offer within the set budget limit is the key. In practice, a small hotel selection in the predefined Rate Caps is available to the Travel Manager, especially for high price destinations. Many companies focus on the few big hotel chains that, in most of the regions, are only a small part of the whole hotel market and ultimately pay a comparatively higher price. Furthermore, they are often lacking benchmark data for a realistic assessment of their costs and also local market expertise needed to achieve the best negotiation results.

Individual hotels: potential often remains unused

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

Missing resources for efficient hotel procurement

For a structured analysis of current travel behavior and systematic negotiations with hotels within the framework of hotel procurement, it is simply time and resources 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 program 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 realized Cost Savings at all times.