The importance of a strong sourcing strategy for hotel accommodation

Jon West
posted by Jon West
1 July 2014

Jon West, managing director at HRS1 July 2014 | Jon West

Now is a key time of year to review sourcing strategies and remember what an important role it has to play when procuring hotel accommodation.

The hotel market is fragmented and highly complex; this means that many companies can often lack the necessary analysis tools and benchmark information needed in order to obtain and negotiate an efficient hotel programme.

However, more and more companies are realising that by accessing data and consultation services on an ongoing basis, they can really optimise their hotel procurement, whilst decreasing accommodation costs permanently.

Many companies underestimate their own hotel expenses – in fact according to the Concur T&E Report 2012, accommodation costs accounted for some 22 per cent of the total travel costs.

Procurement and travel management departments can benefit from outsourcing the sourcing process to a third party as it frees up time and ultimately drives savings in hotel spend as it removes the pain of complex and time-consuming room rate negotiations.

In short, sourcing can help procurement and travel buyers to:

• Reduce direct costs with improved/better hotel rates

• Reduce internal processing costs

• Set a benchmark in accommodation

• Access the widest possible selection of hotels

• Ensure a high availability

• Optimise the portfolio of properties, through consolidation of volumes and/or a new range of hotels

• Increase employee satisfaction

• Reduce the total cost of the trip

It is clear that now’s the time to reap the rewards of the benefits of sourcing, so if you’re not yet thinking about it, it should be next on your agenda.

☛ Jon West is managing director at HRS

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