Global Hotel Programs Don’t Fit ‘Cookie Cutter’ Mold

Last year, the GBTA Foundation released the 2014 Global Hotel Program Study, in partnership with Best Western, interviewing travel managers in North America and Europe who worked on global corporate travel programs and had a role in hotel selection or negotiation. This year, the two partnered again to look at travel managers based in Asia Pacific and Latin America. The two studies were meant to characterize global hotel programs, determine how they function and examine how programs vary depending on region and travel spend.

The motivation for this follow-up study was the expectation that the hotel programs examined this year would look different from those examined last year due to unique market conditions. Many differences were discovered throughout the report, but one key difference was obvious from the start. Many travel managers based in APAC or Latin America oversee regional travel programs for large global or multinational companies. These regional travel managers were included because of their important role in the two regions; however, they would not have qualified for last year’s study which looked only at global travel managers.

Here are some of the key highlights from the 2015 Asia Pacific and Latin America report:

• Chain-wide agreements are more prevalent in Asia-Pacific and Latin America, driven most likely by global hotel programs wanting to standardize the “stay” of their employees no matter where they are.
• In both Asia Pacific and Latin America, Regional Travel Managers are commonly involved in selecting preferred hotels and negotiating preferred hotel rates.
• Hotel programs in Latin America are more likely than Travel Managers in other regions to be guided by their TMCs when it is time to sign new preferred hotels.
• Regional negotiations that are passed on as recommendations to global teams could be behind the high level of satisfaction among regional Travel Managers with the RFP process.

Key highlights from the 2014 North America and Europe report include:

• While companies based in North America tend to have centrally managed programs, their travel policy is also more likely to use guidelines in contrast to European based companies, which are more likely to use mandates.
• High travel spend companies are more likely to issue one global hotel RFP after receiving regional recommendations.
• On average, one in five preferred hotels is dropped from a global program each year after an RFP is issued. The rate is twice as high in Europe as in North America.
• Travel managers in North America are more likely than their European counterparts to enter into individual property agreements, while in Europe global chain-wide agreements are more likely.
• Regardless of region or travel spend, half of respondents indicate they rely somewhat or a lot on TMCs to manage their day-to-day hotel activities.

The research underscores the importance of understanding how and why global hotel programs vary in structure globally. There is no “cookie-cutter” or one-size-fits-all global hotel program. Rather than using a one-size-fits-all approach to their global programs, high-spend companies see value in a team-oriented program where recommendations are sought from local and regional travel managers.