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Leveraging advanced data and analytics in your 2023 hotel program

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Leveraging advanced data and analytics in your 2023 business travel hotel program

Mike Koronkiewicz, Managing Consultant / Director, Intelligence & Analytics

The era of a “set it and forget it” approach to hotel sourcing is over. As travel markets begin to recover, it’s time for a much more streamlined, dynamic, and data-driven approach.

Here’s a look into how leveraging data and analytics can help you maintain a competitive business travel hotel program in 2023 and beyond.

Understand your transactions

Collecting the right data is such an important component in managing your hotel program. Unlike most air transactions that go through a single source, the agency, hotel transactions are very different, with as few as half of your transactions going through the agency. This makes it essential to collect and consolidate your hotel data from all data sources available, so you have a single view of the majority of your hotel transactions that you use to make decisions regarding your hotel program.

At Advito, we can help you by extracting “best of” data for your travel volumes to get a better estimate of your overall travel volumes for each hotel and market. We’ll analyze that data using Dynamic Performance Management (DPM) Plus to help you manage your program more efficiently, giving you more leverage to negotiate with suppliers.

Let your data drive your sourcing strategy

For hotel sourcing, it’s important to collect and consolidate your travelers’ data to create a comprehensive spend analysis that helps you determine which hotels should be sourced. While it’s often tempting to include a wide range of hotels in your program, our data suggests that 20% of your preferred hotels will account for 80% of your spend. So, we highly recommend using a “reduce and diversify” strategy, making it easier to actively manage your hotel program throughout the year. With this approach, you will get a streamlined sourcing list, and you can negotiate your program with the hotels that really impact your bottom line.

Gather the right data for program monitoring and optimization

Once you’ve sourced and implemented your program, the key is to ensure it stays competitive. We use DPM Plus to pull together various data points and benchmarks each month will allow you to draw out conclusions for actions you can take that keep your program relevant and competitive throughout the year. There are three key focus areas where Advito can help:

  1. Consolidated data – You need to consolidate your hotel data sources monthly and compare what your travelers are booking to various benchmarks. This means aggregating your travel agency bookings together with credit card transactions and sometimes even supplier (chain) data and expense data. By consolidating all of these sources together each month, you will get a full picture of what hotels are being booked and the total volumes you bring to each of them.
  2. Rate availability -You want to also audit the availability of your negotiated rates. This is very similar to the traditional rate audits conducted at the end of the hotel RFP, which validate that the negotiated rates have been loaded by the hotels for the RFP contract period. The main differentiator between traditional rate audits and rate availability audits is that rate availability is done on a monthly basis and mimics the frequency with which travelers encounter rates by checking far more dates than a traditional rate audit.With DPM Plus, if the rates found in the availability audit don’t match the program, the hotel is flagged as non-compliant and will receive an automated email failure notice. This immediate proactive notification plays a significant role in holding hotels accountable while minimizing your investment in manually monitoring and chasing hotels. The performance history from the availability audit is also another powerful data point to leverage in future hotel negotiations.
  3. Rate competitiveness –The last piece of data you should consider on a monthly basis is the competitiveness of your negotiated program. Advito’s market rate dashboard does this by shopping the best available rate (BAR) for the future, comparing that to what you’ve negotiated and showing you how deep of a discount your negotiated rates really are.

Using the data to continually monitor and optimize your program

Once you have consolidated your travel bookings and benchmarks it’s time to assess the dynamics between them. Are the rates you negotiated actually being booked? Looking at the rates your travelers book against the contractual or negotiated rate is crucial to identifying saving opportunities, such as when you’ve negotiated a program rate of $100 but your travelers are actually booking a rate of $105 or $110. Our hotel performance dashboard pulls your booking trends and volumes to focus on the opportunities presented by the market rate dashboard and rate availability audits. It also identifies emerging markets and hotels that may need to be added or addressed in your program.

To help you close any gaps between that booked rate and the negotiated rate, you first need to examine the property’s rate availability performance. If the rate shows strong availability but isn’t being booked by your travelers, this is where you begin to also examine the competitiveness of that rate to be sure the rate you’re asking the hotel to make available is also still a good deal. At Advito, we measure this by comparing the level of discount negotiated at each property to the discounts available via BCD Travel’s Global Hotel Program, as those rates may be better deals in your secondary and tertiary markets. And if you can get a better deal with the Global Hotel Program, that’s savings in the form of rate value but also in the form of less investment in sourcing hotels yourself.

Adding the sustainability factor

This topic wouldn’t be complete without addressing sustainability. It’s an issue that’s become increasingly important in hotel sourcing. Using our GATE4 methodology, we have created a rating system for hotels based on sustainability. This can help with making decisions on sourcing that integrate with your company’s sustainability goals and add more value for travelers who care about this issue. Plus, because this methodology is ISO certified you can use this data to accurately report carbon emissions in your annual financial reports.

The future of hotel sourcing

Ideally, travel managers should reduce and aggressively monitor their programs on a monthly basis. Keep in mind, (re-)negotiations aren’t necessary with every property every month. Our DPM Plus tools can help you seamlessly identify where you need to tweak things BEFORE incurring losses and identify where you have opportunities for savings. Collecting relevant data each month can help you make strategic, data-driven decisions on managing the hotels within your program: keep them as-is, attempt to renegotiate, or consider removing any due to the inability to secure a competitive rate that is consistently bookable.

It will also help you understand what to consider for a market overall. If all your rates are competitive in a market, that is a good sign you have enough leverage to keep preferreds in that market. Conversely, if the majority of your rates are non-competitive, you should stop investing in negotiating with hotels because your rates are not a good deal compared to public rates. Your travelers will see that gap and lose confidence in your program. To remain competitive, look to your TMC’s negotiated rate program for coverage along with other strategies – like Traveler Engagement – that guide your travelers to book good rates at hotels appropriate for business travel.

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