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Smart Negotiation Provides Savings on Hotel Costs

Media Release 27 September 2005

Smart Negotiation Provides Big Savings on Hotel Costs

Companies could slice 15 per cent off their total hotel bill through the clever use of technology, combined with skilled negotiation with a large range of hotel partners, according to FCm Travel Solutions, the first Asia-Pacific based travel and expense management specialist.

The cost of laundry, meals, internet access - even drinks from the mini-bar - can be negotiated down if the travel manager has the right tools and skills, according to Greg Hamilton, FCm Travel Solutions General Manager (NZ).

“At FCm Travel Solutions we have both the tools and the skills to save our clients money, often around the 15 per cent mark, which in one case added up to $360,000 on annual hotel costs,” he said.

“These are mid-sized enterprises with a mixture of domestic and international travel, taking advantage of our global reach.”

The group is the only travel management provider in the Asia Pacific region to utilise Uversa technology - the leading global procurement system for negotiation of hotel rates.

And unlike other travel management companies in the region, FCm Travel Solutions has partnered with a broader range of hotels, to offer clients the benefit of greater choice, flexibility and cost efficiency in accommodation.

Rachel Grier, General Manager of the Global Hotel and Client Program at FCm Travel Solutions, said the combination of new technology with powerful industry alliances and negotiating expertise, gave companies the greatest total accommodation value, as opposed to simply the best room rates.

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“Hotel expenditure is a key area of focus for procurement managers and CFOs and they’re increasingly looking at value, not price,” Ms Grier said.

“Sharp-eyed cost controllers are looking more closely at the total hotel spend by travelling staff, to see what economies they can achieve with smart negotiation.

“Using the Uversa technology, FCm Travel Solutions can negotiate with hotels on the total spend by its clients, and can do a cost benefit analysis of each offer to establish where the true value lies for a particular client,” she said.

“We can negotiate with hotels on everything from breakfast/dinner deals, to laundry, internet web access, even mini-bar charges, and make a recommendation to the client on which hotel offers the best value.

“We are one of the leaders in using this technology to negotiate, solicit and benchmark these types of components.”

Ms Grier said FCm Travel Solutions also partnered with smaller, boutique size properties (as well as the major hotel chains) because they often provided the best fit for clients.

The group currently works with more than 14,500 hotels globally, and is in the process of contracting approximately 40,000 hotels for 2006.

Mr Hamilton said technology and negotiating strength have enabled FCm Travel Solutions to deliver significant and measurable accommodation cost savings for clients, large and small.

“We had an Australian corporate client who negotiated a $195 room rate at a particular hotel group. Our team closed the negotiations with the same hotel at $165, valid to 2006, with upgrades and other value-adds such as breakfast.

“Considering breakfast is usually $30 in a hotel, at 6,000 room nights (the total required by the client), we delivered a saving of $180,000 in food alone, and double that when you include the saving on the room rate,” he said.

Mr Hamilton said hotels were coming to terms with the new era of cost accountability and the days of making up on the extras what they might have discounted on the room rates were drawing to a close.

“Hotels do have to compete. But some also take the bigger picture view that negotiating with us, to provide our clients with a better value deal, will win them more business,” Mr Hamilton said.

“Our travel cost management services and tools are all about achieving substantial savings through the complete travel process, from travel booking through to expense management.

“Our technology also creates measurable outcomes. It provides sophisticated management information reporting that allows clients to track, monitor and control their spend ‘at a click’,” Mr Hamilton said.

FCm Travel Solutions offers small, large and multinational companies travel solutions in more than 50 countries around the world. Services and benefits include streamlined travel management, world-best fares of the day, unprecedented control of travel expenditure and policy compliance, and 24/7 emergency assistance worldwide.


About FCm Travel Solutions

FCm Travel Solutions is the first Asia-Pacific based, global corporate travel and expense management specialist, proactively delivering industry-best solutions and measurable cost reductions for companies of all sizes. FCm Travel Solutions provides a global network of local expertise, state-of-the-art technology driving time and cost savings, and a flexible business model that enables services to be tailored to every client. It is the corporate travel flagship of Australasian-based travel company, Flight Centre Limited, which has been awarded in many countries for its travel industry leadership and innovative people development. For further information visit: www.fcmtravel.com

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