This post is part of the 2015 Keynote Vote for The Beat Live, in Arlington, Va., Sept. 29-Oct. 1.
Topic: The Dysfunctional Relationship Between Corporations And The Hotel Industry
Hotels are the No. 1 corporate travel expense and rising. TMCs are struggling to provide value when selling hotels and are contractually obligated to offer the best rates available. Travel managers are judged on their performance to reduce hotel spend and generate cost savings.
After working with travel managers on hotel shopping for several years, I am amazed at the dysfunctional relationship between buyers and sellers. The procurement process is fraught with inefficiencies, lack of controls, misinformation, inability to deliver on contractual agreements, etc. Traveler managers spend a significant amount of time and money selecting and negotiating rates with "preferred" hotels only to find out later that the rates they contracted are rarely available. The amenities that are included in these rates are rarely provided or used. Commissions to be paid are rarely received. What's more amazing is this dysfunctional situation has been allowed to survive for over 40-plus years.
The reasons for this situation are many: lack of property control by the major brands, property managers reluctance to offer discounts they believe are unnecessary, challenges with rate loading in the GDS, inability to measure corporate performance to contracts, corporate travelers booking around the approved channels, GDS and OBT limitations in selling preferred hotels, property managers ignoring LRA commitments, squatters, travel managers unable to shift share, travelers able to find lower rates than contracted, etc. The list goes on and on.
In my session, I plan to openly discuss these issues and provide tangible solutions to resolve them without it becoming a sales pitch. A significant change in the way travel managers procure hotel rooms is long overdue.
Steve Reynolds is tripBAM CEO.