There are more than 600,000 hotels worldwide, and that's before you add in Airbnb and other non-traditional lodging providers. A study by HRS found however that despite so many properties, the vast majority of corporate hotel stays take place at only around 60,000 to 80,000 hotels.
If you're a hotelier and you have found that your corporate account revenue has taken a hit, and perhaps you have even lost some of your key corporate accounts, it might be time for you to stop what you're doing, read the rest of this article, strategize and move on.
With more and more companies giving increasing attention to their corporate compliance policies, their compliance policies on how their employees travel and what hotels they are permitted to stay at mean that the pool of qualifying hotels are becoming less and less.
While the corporate guests who are staying in your hotel might appreciate your hotel, its location and the service that they're receiving, the reality is that when they get back to their offices, some of the compliance and expense reporting requirements from their Accounting and Human Resource Departments mean that they are being left out of pocket because some companies are refusing to reimburse the full amounts that they are claiming for for any given trip.
How can Hoteliers Ensure that they Don't Lose Corporate Accounts to Competitors?
Both Hotel GM's and the Sales and Marketing Departments need to momentarily at least, step out of their roles as hoteliers, and look at their corporate accounts from a company's point of view. These companies who sign agreements with hotels need to ensure that they are getting the best value for money when their employees are away from home.
Most importantly, the less money that they have to reimburse to the employee after the trip the better, as additional costs need to be controlled, and with each reimbursement comes a 'cost of reimbursement' on top of the actual reimbursement charge.
In their eyes, an ideal corporate contract with a hotel or a hotel group will mean that wherever possible, opportunity of incidental charges have been brought to a minimum - usually by pre-negotiating these things into the corporate contract and including them in the rate paid to the hotel directly by the company.
An HRS sponsored report by the Global Business Travel Association investigated the issue of companies' travel compliance policies with employee travel habits and the impact on choices they make when booking hotels, air travel and car hire.
50% of the business travelers surveyed say that their current booking selections are based on mandates from what the report calls 'Travel Managers', who could be considered the HR Departments or Accounting Departments enforcing the companies' travel compliance policies.
This 50% figure was in contrast to only 36% of 'Travel Managers' saying that they actually mandate what hotels and other bookings are selected in their compliance policies. These Travel Managers rather believed that their policies were more 'guidelines' to help their employees make good booking decisions.
Perception is important however, so even though a company may not officially mandate a policy, if a guest perceives that staying at a given property will contravene the travel policy of their company, they will choose not to stay there to stay on the safe side. Guests' company travel policies had a 79% importance ranking when considering factors that contributed to choosing a given property to stay at. Hotel loyalty programmes ranked way down on the list with an importance weighting of only 50%.
Make Sure You're Negotiating the Right Things
Whether or not a hotel is able to maintain lucrative corporate accounts is a constant dance between providing services and amenities that are deemed as important to corporate guests, while ensuring that these services are seen as valuable and can be non-volatile costs that can be incorporated into the corporate agreements with Travel Managers, all the while ensuring that the contract remains profitable for the hotel.
While hotels are putting a great deal of effort into promoting their loyalty programmes directly to the guest, loyalty programmes for individual guests mean very little to a company's HR or Accounting department. Rather, things that might be seen as more valuable to negotiate with Travel Managers include things that may have otherwise incurred additional reimbursement costs such as WiFi, breakfast, early check-in, late check-out, room upgrades, pool and fitness centre access, and access to the executive lounge.
Keeping your corporate accounts' Travel Manager up to date of their employees' travel behaviour through more detailed reports, and insights based on travel data that has been generated can ensure that you as a hotel remain a valuable business partner with them, helping them to maximise their investments in their employees' travel by helping to ensure that they satisfy their compliance targets.
When thinking of 'customer service' for corporate guests, your team needs to realise that for every individual guest, there is also an army behind them that will also be evaluating the stay from behind the scenes.
HRS as a B2B corporate booking partner for thousands of companies around the globe, helps their B2B customers by providing not only the sales channels, booking services and payment gateways that companies need to make their corporate travel bookings, but they also provide in depth, AI driven reports and insights based on guest data, trends and other information that allows clients to keep optimal compliance levels, ensuring that travel budgets are getting the best ROI possible.