August 23, 2007
Rochester, Wisconsin − Many corporations cite increased emphasis on hotel negotiations and use of economy-type hotels as the primary techniques used to control lodging costs, according to a recent survey of travel managers completed by Runzheimer International. Travel managers from a wide range of companies within various industries responded to questions relating to cost-saving methods, soft dollar benefits, hotel selection criteria, and overall satisfaction with hotel negotiations.
According to Runzheimer’s 2007 Hotel Negotiation Survey, lodging costs represent 30% of total travel and entertainment expenses, with the largest group of respondents spending between $1 million and $5 million per year. As indicated in the previous year’s survey, hotel negotiations resurfaced as the method used by most travel managers to control lodging costs. Seventy-eight percent of respondents actively negotiate with hotels to obtain discounts, with typical discounts ranging from 11 to 15 percent. Ninety-three percent of respondents reported negotiating rates below standard corporate amounts, up from 68 percent ten years ago.
Other methods used to control lodging costs include negotiating with more companies as well as implementing a written Request for Proposal (RFP) process. On average, respondents negotiate with 229 properties, the top five of which include Hilton, Marriott, Starwood, Intercontinental, and Sheraton. Fifty-seven percent of respondents use a written RFP process when selecting lodging suppliers.
“Hotel negotiation can result in significant cost savings as well as other soft dollar benefits,” says Phyllis Schumann, Product Manager of Travel Management Services at Runzheimer International. “However, travel managers must also communicate effectively with travelers to maximize the full benefits of these negotiations.”
In addition to stepping up negotiation activities, respondents are also increasing use of economy-type hotels. Although first-class properties continue to be used most often, economy-type hotel use is up 31 percent from the previous four years. Seventy-four percent of respondents reported that they have business travelers who frequently use economy-type hotels.
“There isn’t the significant difference between hotel types there once was,” says Schumann. “Since nearly all hotel types offer free high-speed internet connection and continental breakfasts as the norm, companies are saving money by putting travelers in lower cost hotels, without sacrificing service and traveler satisfaction.”
About Runzheimer International
Founded in 1933, Runzheimer International serves 60 percent of the Fortune 500. Runzheimer International provides a full suite of employee mobility services in the areas of virtual office, telecommuting, technical support programs, business travel, business vehicle reimbursement programs, background screening, corporate aircraft, relocation, and international assignment programs.
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For more information contact Jennifer Ruppel at Runzheimer International, Runzheimer Park, Rochester, Wisconsin 53167, (262) 971-2271, jmr@runzheimer.com, www.runzheimer.com.
