A declared desire to control budgets, but still a lot of work to do... Any resemblance with current economic events would obviously be fortuitous. However, optimising hotel spending remains at least as thorny an issue for companies as the slide in public finances is for many European countries. And that's saying something. For some years now, it has even become one of the main preoccupations of travel managers, who are hoping to rationalise an item worth almost five billion euros in France alone, the second largest travel budget after air travel.
Of course, companies are not...
A declared desire to control budgets, but still a lot of work to do... Any resemblance with current economic events would obviously be fortuitous. However, optimising hotel spending remains at least as thorny an issue for companies as the slide in public finances is for many European countries. And that's saying something. For some years now, it has even become one of the main preoccupations of travel managers, who are hoping to rationalise an item worth almost five billion euros in France alone, the second largest travel budget after air travel.
Of course, companies have not been sitting on their hands, and have long been compiling lists of recommended hotels for their employees. But between the thousands of establishments run by the major groups and the countless independent players, these hotel programmes are often overwhelming. "One of my clients had a programme of 1,300 hotels, some of which received no bookings at all during the year. We reduced this to 250explains Stéphane de Laforcade, Chairman of the HCorpo booking platform. In the fragmented world of the hotel industry, negotiations are often no more than a matter of principle, more akin to referencing."Well-ordered negotiations also start with excellent data. However, and this is another obstacle to optimising expenditure, for a long time hotel bills were paid on check-out, by credit card, thus reducing the possibility of effective reporting. Fortunately, the emergence of new payment methods, such as the virtual card, is helping to provide greater visibility of accommodation costs.
Finally, this low level of awareness can also be explained by the limited application of the programmes defined by companies. This may be because the employee cannot find the establishment in the booking solutions provided; or because the rates offered seem excessive and the employee goes surfing on the internet to find a better price; or because the company's policy is fairly liberal and leaves the traveller a certain amount of latitude to book wherever he likes, as long as the amount does not exceed a defined ceiling... For a thousand and one reasons, then, travel policies are much less applied in the hotel industry than in the airline industry.
The throes of multitude
There are good reasons for this shift. For a long time, to book their hotels, companies relied on their travel agencies, which in turn passed on what was available through the GDSs. However, these distribution systems, which originated in the airline industry, have long struggled to offer the full range of hotels through their channels. "The two markets are completely differentsays Bertrand Flory, Amadeus Sales Manager. By offering 700 traditional airlines and 70 low-cost carriers for booking, we cover almost the entire global offer. On the other hand, even with more than 100,000 establishments - which is not a bad figure in itself - we are a long way from covering all the hotels in the world. This is a concern for the agencies."As a result, the solutions offered by the agencies have difficulty in meeting all the needs of companies.
As the nature of business hates fools, hotel reservation specialists such as HRS, HCorpo, CDS and iAlbatros have taken advantage of the situation to establish themselves as key intermediaries. Today, companies are not hesitating to compare forces and issue invitations to tender solely for the hotel component of their expenditure. "Over the last few months, I have noticed that these 100% hotel tenders are systematically won by central reservation agencies, not travel agencies."says Ziad Minkara, founder of CDS. HCorpo has recently become the hotel partner of L'Oréal, while HRS counts Roche among its new customers.
Hotel reservation centres base their offer on choice, which is where agencies fall short. With more than 200,000 hotels, they know how to offer alternatives if the hotels listed by the companies are not suitable for travellers. What's more, while travel agencies have preferential rates with most of the major hotel groups, these specialists in the sector also offer competitive prices. "Since last year, we have had a business rate with free WiFi and same-day cancellation until 6pm."says Emmanuel Ebray, France Director of HRS. "As well as loading the contracts negotiated by the companies into our tools, we also compare the rates we have obtained ourselves with the hotels, says Stéphane de Laforcade. As our business model is based on buying and reselling rooms, and with our leisure partner Teldar, we buy a large volume, both during the week and at weekends, in summer and winter. All in all, our rates are very good. This means that travellers can find the best price and make a 'best buy' at all times. And all this without bookings leaving the corporate circuit and going to Booking, for example."To keep up with the trend towards the lowest cost, CDS will be uploading hotels. com's general public rates to its tools, even those subject to strict cancellation conditions.
Faced with the growing power of booking platforms, are business travel agencies out of the game for good? According to accommodation professionals, their role as intermediaries still gives them a definite weight in hotel bookings. "The major business networks are still at the heart of the system, in particular because of the key role played by air transportWe're looking forward to working with you," says Jean-Luc Chrétien, Accor's Executive Vice President, Distribution, Sales and Loyalty. "Over the past two years, we have forged partnerships first with Radius, then Carlson Wagonlit and this year with American Express, says Olivier Cohn, General Manager France of Best Western. We are seeing an increase in the volume of business for our hoteliers."
Agencies strike back
So the travel agencies haven't completely lost the plot. "We provide advice to our customers to help them build a hotel programme that is in line with both company policy and travellers' wishes."says Sébastien Marchon, Global Consulting Director at American Express Business Travel. Carlson Wagonlit is also continuing to refine its offer. "As well as offering an easy-to-use booking tool modelled on consumer websites, we are developing the content side of the business."says Laurent Comte, Managing Director of Business Travel France at CWT. It could be that the agency will turn to Booking in particular to broaden its offer. CWT is conducting a pilot phase of mobile booking via its CWT To Go application, which allows users to search for, book and cancel rooms using a smartphone. This is an area in which only HRS has already ventured.
Strategic cogs in the system, the GDSs have also given travel agencies a helping hand on the content side. For example, Amadeus has developed the LinkHotel solution, which enables independent hotels to be integrated into the distribution system. Most importantly, the GDS launched Amadeus Hotel Plus in summer 2013. "This offline solution was ramped up in 2014, emphasises Bertrand Flory. Aware of the need, for both agencies and companies, to extend the number of establishments available, we have worked to alleviate this concern."Through Amadeus Hotel Plus, travel agents now have access to content from distributors such as Alba Travel, Bedsonline and Travelcube, as well as HRS and soon HCorpo and Teldar, in the first half of 2015. "We're adding almost 100,000 hotels to our offering thanks to these aggregators"says Bertrand Flory. At the same time, AeTM, the self-booking tool developed by Amadeus, is also being integrated into the HRS and HCorpo offer. "For each hotel, users will find the rates negotiated by the company, those offered by the agency and those from the aggregator. But you can select just one source if you want".says Bertrand Flory.
As these solutions interweave, hotel reservations should soon be more harmonious. Especially as this desire for integration extends to the payment methods available to companies and to expense management tools. "The pieces of the jigsaw are falling into place. The market is becoming more professional. It will take another two to three years before it reaches full maturity."says Ziad Minkara. "For our key accounts, we need to be compatible with as many GDSs and travel agencies as possible to offer a unique level of satisfaction on this side or the other of the Atlantic."explains Emmanuel Ebray. Within this framework, HRS is a partner of all the GDSs - Amadeus, Sabre and now Travelport - and soon of American Express. And he is delighted: "with this interweaving, it becomes fantastic."
The hotel groups' efforts to win you over
As well as offering companies competitive rates - "it's up to us to offer the best buy"As Jean-Luc Chrétien, Accor's Executive VP Distribution, points out, hoteliers are seeking to stand out from the competition from consumer websites by offering added value to business travellers. "We include in our negotiations the advantages linked to our loyalty programme so that, for example, Mr Dupont, a company director who travels very little, is recognised in the same way as Mr Martin, a sales manager who makes dozens of trips a year."says Jean-Luc Chrétien. To rationalise this fragmented budget and give companies greater visibility over their expenditure, Louvre Hotels has launched its PassForYou Entreprise season ticket, designed for SMEs and mid-sized companies. As well as offering discounts on rooms and meals, PassForYou Entreprise allows payments to be centralised through a single monthly invoice sent to the company. The programme will also enable spending limits to be set per employee. Thanks to this card, travellers will no longer have to advance their hotel and catering costs or manage their expense accounts. Based on the same model, Accor will soon be adding to its 'away on business' package, with detailed reporting, payment facilities and the possibility of centralised invoicing.
Reporting: the holy grail...
In addition to booking, controlling the hotel budget requires ad hoc payment solutions and effective reporting. The problem is that the debit card, which has streamlined the payment process in the airline sector, is not as widespread in the hotel industry. Payment by credit card is still often the norm, with travellers being reimbursed on the basis of an invoice that is not always detailed. But things are changing. In this respect, the recent rise of the virtual card has a twofold benefit: the ability to book and prepay for hotels online, and the ability to integrate these expenses into the corporate payment control circuit. Most players now accept this method of payment, including GDSs, business travel agencies and reservation centres. HRS, which for a long time focused on reservations, has now concentrated on payment by integrating the AIDA virtual card from AirPlus, while also accepting the vPayment card from American Express. "In addition to this, we are building a monthly billing solution, says Raphael Convers, HRS Marketing Director for France. We can no longer position ourselves with a single payment model. We need to be able to respond to all the issues facing businesses."For its part, CDS accepts numerous payment methods and also offers a centralised solution. But the company that has made centralised payment its main focus is without doubt HCorpo. The company buys overnight stays and then resells them to companies, so it is ultimately HCorpo that pays its expenses. In return, HCorpo presents an invoice to the company with full analytical reporting, which can also be paid using an Air Plus or American Express debit card.
