A longtime Advito hotel sourcing client had been fine-tuning their program for several years but only seeing incremental improvements. They were ready for a new approach to find more savings. It was also important for the client to improve program compliance. Specifically, there was interest in understanding why compliance might be lower than it should be.
The company brought in corporate travel consultancy Advito to help improve program compliance, optimize hotel spend, and drive meaningful savings throughout the year.
- Industry: Financial services
- Headquarters: United States
- Annual hotel spend: $12.4 million
- Employees: Over 1,300
- Hotels in program: 111
Advito provided a Dynamic Performance Management approach that focused on the client’s top 10 markets, representing 58% of the program’s total spend.
This tailored solution, which complemented the client’s longstanding hotel sourcing engagement with Advito, included monthly:
- Best Available Rate (BAR) Audits for greater visibility into consumer rates and to evaluate the competitiveness of the program’s rates.
- Rate Availability Audits to identify suppliers who repeatedly didn’t offer the negotiated rates and then to negotiate lower rates.
- Hotel Performance Dashboards to track and review program compliance and key performance indicators, and to identify savings opportunities.
- Consultant insights and actions to drive program improvements.
During a monthly review, Advito consultants noticed a lag in compliance and discovered it was because some negotiated rates were not available for booking. With Advito’s help, the client met with the offending hotels to ensure the negotiated rate would be available for their travelers as expected, keeping costs down and travelers compliant.
The client improved compliance from 71% in 2015 to 78% in 2017, and the program is on pace to achieve 83% compliance in 2018. It’s also projected to achieve $400,000 in cost savings during 2018, which amounts to 3.2% total savings on their annual hotel spend and 3.8% savings in their top 10 markets.
Additionally, this new dynamic approach enabled the client to reduce the number of hotels in its 2018 program by 8%. Further reductions are expected in 2019. This program reduction and regular communication with suppliers have the client feeling confident and primed for the next RFP season.
The monthly insights and actions uncovered areas of low program performance for the client to correct. One correction yielded both increased savings and compliance.