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A Strategic Approach to Consolidating a Hotel Program

Creating valuable cost savings for hotel programs

52%

reduction in number of properties 

$2

rate reduction resulting in $81,000 cost savings

42%

of properties committed to 18-month rates

When a large, global healthcare organization recently acquired a new company, they needed to structure and manage the mid-year transient hotel RFP for key domestic markets. The organization decided to partner with Cvent to help manage their preferred hotel program.

During this transition, the organization needed to identify the best means of consolidating the two existing hotel programs while identifying potential synergies that would help drive key cost savings. With over 300 offices across the globe, the industry-leading global healthcare provider tracked combined transient hotel expenditures in excess of $30 million.

Ensuring Transient Hotel Program Success with Cvent

Cvent had managed the organization’s transient hotel program for several years, successfully containing costs, driving savings, and achieving value-added amenities and services. Key stakeholders therefore entrusted Cvent with the opportunity to devise a strategy which would drive considerable cost savings through combined programs due to increased room nights and hotel spend. They worked closely with the companies’ travel and procurement managers, as well as an external professional services firm that provided consulting services to the company for its acquisition.

Cvent’s team first needed to evaluate the existing transient hotel program for both organizations to identify overlap properties and shared markets. With the goal of reducing expenditures due to the recent acquisition, they could further identify opportunities to consolidate properties and create valuable cost savings for the organization. They developed a tiered approach which would create actionable results at each step of the process. First, the team obtained all hotel data from the acquired company’s TMC, as well as a list of office locations. From there, they identified that organization’s key properties and markets based on room nights, comparing them to the company’s hotel profile. With this data in hand, they were able to identify overlap properties across the two organizations. This allowed them to analyze shared markets and additional markets where the previous individual companies did not have ample volume for hotel solicitation, but where the now joint volumes presented an opportunity.

Strategizing Actionable Solutions through Partnership

After mapping these key data points to their strategic plan, they created a cross-analysis to compare rates, amenities, and services for overlap properties. The analysis provided quantifiable, high-level potential cost savings for the organization.

As an actionable next step, they mapped existing preferred hotels to company offices to identify clusters. They also incorporated nearby properties that had not been previously solicited. Together, they communicated to these key properties and hotel chain Global Account Managers via the organization’s dedicated team. They were able to launch a mid-year RFP through Cvent Business Transient thanks to the established programs across both organizations.

With continuous monitoring, the team was able to evaluate responses, provide recommendations, and negotiate as appropriate. They were even able to conduct online reverse auctions in select markets and reduce the number of properties to 32 in key markets. Moreover, they reduced rates and extended them for up to an 18-month period. Across the project lifecycle, the Cvent team ensured continuous visibility and input into the process with regular analysis and working sessions to review metrics, map data, and identify opportunities. They also co-evaluated proposals and recommendations with the client while obtaining agreements to strategically negotiate and source properties at various points in the project. The entire project was completed within nine months, from initial data-gathering starting in January to conducting online reverse auctions in September.

Showcasing Program ROI for Key Stakeholders

With this collaborative approach, the client was able to reduce the number of properties by 52% in over 30 domestic markets. They saw an Average Weighted Rate (AWR) reduced by $2 overall for these markets and achieved an $81,000 cost savings. They also obtained commitment for 18-month rates/amenities/terms for 42% of the accepted properties.

The organization contributes their clear success to a strategic approach in tandem with their Cvent team’s guidance. Together, they were able to target those markets with the greatest number of room nights/expenditures, which therefore presented the greatest opportunity. They also appreciate Cvent’s transient hotel program consulting expertise, with the use of Cvent’s Business Transient technology to manage hotel solicitation, benchmarking, and e-auctions. Lastly, the longstanding relationship between the organization and Cvent meant the dedicated team was able to ensure success through deep familiarity with the organization’s hotel program and culture. Cvent provided industry-leading expertise, sourcing technology, and an understanding of the organization’s culture to meet these objectives. 


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