Cos waste min $500 mn annually in hotel spend
Companies collectively waste half a bn dollars annually by failing to strategically manage their hotel program, said American Express Business Travel in its estimate.
By ET Online |
NEW DELHI: American Express Business Travel estimates that companies collectively waste half a billion dollars annually by failing to strategically manage their hotel program. In response, American Express today announced the launch of a new hotel management solution called hotel eXpert that will identify and drive significant savings for businesses.
Jonas Borglin, Head of Advisory Services for American Express Business Travel, Japan, Asia Pacific and Australia comments, ���Many companies lack sufficient control and visibility over their travelling employees and it���s costing them significant dollars. In fact, 22% of all travel bookings are non-compliant with corporate policy. In these instances it���s the travelling employees, rather than senior management who dictate the terms and conditions of travel bookings.���
���We���ve discovered that inefficient hotel program management alone, costs companies at least half a billion dollars a year, which regardless of the economic situation, is a sizeable sum. When a hotel program is being managed inefficiently, employees stay at hotels of their own choice, spend company dollars on hotel services and amenities and even dictate the length of their stay.���
Borglin argues that over the past year companies have been swift to mandate stringent travel policies and in some cases complete freezes on spending, rather than examine missed savings opportunities. This has forced a reduction in corporate travel and significantly impacted the way companies do business.
���Right now companies stand to make significant savings across all elements of corporate travel, especially when it comes to hotel bookings, yet many aren���t taking advantage of them. The economic downturn has seen hotel occupancy and rates decline globally and now that the hotel negotiation season has started, it���s a good time for companies to start building partnerships with hotels that deliver sizable cost benefits. Our aim is to work with our clients to ensure savings are achieved and they become better equipped at strategically managing their hotel programs���, he added.
Jonas Borglin, Head of Advisory Services for American Express Business Travel, Japan, Asia Pacific and Australia comments, ���Many companies lack sufficient control and visibility over their travelling employees and it���s costing them significant dollars. In fact, 22% of all travel bookings are non-compliant with corporate policy. In these instances it���s the travelling employees, rather than senior management who dictate the terms and conditions of travel bookings.���
���We���ve discovered that inefficient hotel program management alone, costs companies at least half a billion dollars a year, which regardless of the economic situation, is a sizeable sum. When a hotel program is being managed inefficiently, employees stay at hotels of their own choice, spend company dollars on hotel services and amenities and even dictate the length of their stay.���
Borglin argues that over the past year companies have been swift to mandate stringent travel policies and in some cases complete freezes on spending, rather than examine missed savings opportunities. This has forced a reduction in corporate travel and significantly impacted the way companies do business.
���Right now companies stand to make significant savings across all elements of corporate travel, especially when it comes to hotel bookings, yet many aren���t taking advantage of them. The economic downturn has seen hotel occupancy and rates decline globally and now that the hotel negotiation season has started, it���s a good time for companies to start building partnerships with hotels that deliver sizable cost benefits. Our aim is to work with our clients to ensure savings are achieved and they become better equipped at strategically managing their hotel programs���, he added.
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