The reduction of total travel cost is an age-old goal for corporate travel managers. Hotel programmes must stay within strict price limits, but those travelling must be sufficiently catered for. Travellers expect adequate hotels for their business trips, which puts the travel manager under pressure from both sides.
As a result, reducing direct and indirect expenditure is one the biggest challenges for travel managers and a cornerstone for consideration in any hotel programmes. In a direct response to enabling more expenditure, the global hotel solutions provider HRS has launched a new “real-time rate” filtering automation system, designed to prevent incorrect booking rates from being shopped by business travellers.
In 2017, research by the Global Business Travel Association found 17% of hotel rates in corporate shopping channels were incorrect. Companies are paying 14% more than their negotiated rates. In more egregious samples, HRS stresses that it has seen erroneous rates of 20% or higher, estimating the cumulative lost savings in the industry at USD662 million.
An error rate of this magnitude – and the losses incurred – would be unacceptable in any other area of corporate procurement, HRS emphasises.
GBTA’s research considered a sample of 200 companies, which revealed that only a fraction check the accuracy of hotel rates on a frequent basis.
Specifically, just 2% conduct a rate audit on a weekly basis and 7% do so monthly. The rest of the companies only check every couple of months (22%), once a year (31%), or every time the rate is loaded (33%). The GBTA survey also showed little consistency when it comes to how often discrepancies between the negotiated hotel contract and the rate (including amenities) appear in the system.
The new ‘Rate Filter’, with patent-pending technology, aims to address this long-standing issue. It will directly tackle the so-called ‘squatter’ hotel rates in corporate booking systems, with the tool said to be “machine learned” and “channel agnostic”.
The tool works by identifying incorrect rates and preventing them from appearing in shopping channels used by business travellers, including GDSs, online booking tools, mobile apps and more.
In one case, HRS identified errors that would have cost a global manufacturing firm more than USD9 million per annum – had they not been fixed.
While rate auditing and rebooking – typically reactive solutions – help corporations recover some savings, the rate filtering technology actually goes further to obstruct a squatter rate from being booked.
Martin Biermann, vice president of product development and innovation for HRS, said: “This filtering automation transforms the hotel rate accuracy conversation. The rampant errors in booking systems today costs companies more than half a billion dollars. With HRS’ Rate Filter, corporation will see more of the savings they negotiated, and travellers can be assured they are following designated company booking policy”.