Hotel programme consolidation
by Deborah Wilson, HRG Business Manager
HRG highlighted to a Government client that it could reap financial benefits from consolidating its hotel choice in Leeds where the company produces 4500 room nights.
The client books Government rates or the best available rate with a limit of £90 for bed and breakfast outside of London.
They were booking 19 different hotels with various rates and three out of the top five properties booked average rates of £83 - £87 for bed and breakfast, including VAT.
We saw benefit both in terms of costs savings and policy management by consolidating the choice of hotels in the city. Savings could be achieved by securing an agreed rate for travellers of £79 bed and breakfast including VAT using just five hotels, delivering potential savings of more than £10,000 plus additional benefits specific to the organisation.
Based on the success of the exercise, we can also extend this elsewhere in the UK.
HRG and the client worked together to agree the most suitable hotels in Leeds with HRG advising them of the additional volume they could benefit from plus increased marketing opportunities through a recognised client base. All hotels were within walking distance of the client’s local offices and we agreed rates of £79 or less in the case of one of the properties.
We also managed to negotiate allocation at two of the five properties and also got three of the hotels to agree a dinner rate within the client’s allowance. Specific details on the properties were given to the client to put on their Intranet.
The client informed travellers of the preferred programme on an agreed date and with HRG’s help and support referred any questions to their designated contact. There was 92% compliance for the first quarter which has now increased to 94%.
All exceptions are detailed on management reports and emailed to a designated client contact. Average room rate is now £79 bed and breakfast including VAT in Leeds.
The exercise was viewed a success by the client highlighted internally as a cost saving initiative which improved the profile of the procurement team. We are currently carrying out the same exercise in London where more than 100 different properties have been used up to now. We are hoping to reduce this down to 10 working within the client’s limit of £125 bed and breakfast including VAT.
The client said: ‘Due to the mandated hotel programme in Leeds we are now clearly managing our hotel spend and making the most of our purchasing power, we have agreed value added benefits with the properties and most importantly have given a clear directive to our staff’.
All prices quoted in GB sterling.
Prices quoted correct at time of activity.
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