Dynamic hotel sourcing – aiding travel managers

Corporate travel managers are growing wary of the manual and time consuming process of hotel requests for proposals, a recent white paper from the Association of Corporate Travel Executives found. The majority of travel managers surveyed expressed their dissatisfaction with the traditional hotel sourcing methods and wished to make a change.

Travel managers are looking to a newer, dynamic systems and strategy for hotel management which are in line with the technological advancements seen in almost every other aspect of travel. Despite these findings, it appears from the paper New Approaches to Hotel Sourcing, that most corporate travel programs are still following the archaic patterns form their hotel bookings for 2018.

The New Approaches paper puts data behind the universal hotel-sourcing paradox:

  • 56% of travel managers surveyed plan to source more than half of their 2018 room nights via an RFP.
  • 29% will use RFPs to source at least three-quarters of their rooms.
  • Just 38% believe the traditional RFP-based hotel sourcing method gives their program the best return on investment.
  • 55% of travel managers expect annual RFP setup to consume more than 50 hours of their time, while 40% believe maintenance will require more than 50 hours.

There are however solutions available:

  • 42% of travel managers are using some degree of dynamic hotel sourcing, with 20% saying they are using the dynamic model to source at least half of their room nights.
  • 70% of managers using a dynamic approach secured more than half their rooms at their negotiated rate in the last sourcing cycle.
  • Managers leveraging dynamic sourcing are a third less likely to say they lack data on their negotiated-rate attachment levels.
  • Asked to focus specifically on the advantages of dynamic models, travel managers homed in on strategic improvements: 44% say it offers greater flexibility; 42% point to improved traveler satisfaction; and 33% say dynamic sourcing helps them increase compliance.

“Taking advantage of dynamic sourcing methods can vastly reduce the time and energy spent on negotiating hotel contracts, lead to ongoing program improvements and enhance the traveler experience,” says Charuta Fadnis, senior director of Research & Intelligence for BCD Travel.

Executive Director of ACTE, Greeley Koch, believes that “institutional inertia” is a problem. “For many years, RFP-based hotel sourcing processes have been the norm with no viable alternatives. But travel managers now have access to newer, more cost-effective tools—and need to move away from the ‘this is how we’ve always done it’ mind-set.

Making any kinds of changes always entail some measure of risks, and sometimes implementing changes alongside traditional methods work best for some organisations. “The key to success will be trial and error, and not being afraid to step back, evaluate what didn’t work and continue to forge ahead,” Fadnis said. “Education is the first hurdle travel managers must overcome. They should rely on their partners to help them navigate the noise and understand not only the solutions available, but which are best suited to their managed travel programs.”

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