Asia corporates focus on compliance and consolidation to combat hotel rate rises

Corporates across Asia have been focusing on hotel program consolidation and traveller compliance to save on accommodation costs, according to global travel and expense management specialist FCm Travel Solutions.

As a result of changing market conditions, organisations have been working closely with their travel management companies (TMCs) to assess and streamline hotel programs to optimise the value of their hotel spend.

Industry research indicated that by the fourth quarter of 2010 the average occupancy rate for Asia Pacific had spiked to 70% and forecasts from several different hotel chains revealed continuing hotel rate rises of between 7% and 10% during 2011.

FCm Travel Solutions global director of account management Felicity Burke said the impact of rebounding conditions on client preferred hotel programs for 2011 saw corporates renewing their focus on consolidation, compliance as well as policy and procedure.

“With the help of FCm, companies have been assessing their hotel programs to reign in, out-of-policy bookings and stop leakage of room nights to non-preferred properties,” Mrs Burke said. “Corporates understand they will be rewarded for their loyalty and commitment to their preferred properties and as a result have been working closely with FCm to ensure they are delivering their negotiated room night volumes and buying at the agreed negotiated rate.

“Companies have also been enforcing more stringent travel policies and procedures to minimise missed savings through non-compliance. FCm has also recently released to its global clients a ‘missed hotels’ report to help corporates identify travellers that have not booked hotels with FCm. It is critical that we provide this level of travel data and intelligence for our clients.”

Mrs Burke said many corporates had also been relying on FCm to enhance their hotel programs with accommodation sourced through FCm’s unique multi-sourcing product platform, including FCm Global Hotel Program rates and local wholesale rates, or to negotiate discounts off the BAR with major chains.

“Clients using this strategy use preferred hotels that are chosen on the basis of their location, facilities and volume commitments by travellers; as well as discounted rates for major chains that are in locations where their company does not have a preferred hotel. This is generally the case if their company has low room night volumes for that location or if it’s a new business destination,” Mrs Burke said.

FCm had also been helping clients overcome hotel rate rises by targeting new hotels that are hungry for business and negotiating hard on inclusions such as free internet, breakfast, transfers and food and beverage discounts to maximise the value of their hotel spend.

Mrs Burke said that during the next 12 months companies in Asia would continue to focus on consolidation and compliance to combat rebounding conditions in the hotel sector in Asia and in other global markets.

Source: Travel Daily News