Driving ROI The Business Case for Transient Hotel Management Software. A Whitepaper by Lanyon
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1 Driving ROI The Business Case for Transient Hotel Management Software A Whitepaper by Lanyon
2 02 Table of Contents 03 Introduction 04 Winning the Competition For Business Travelers 05 Take Control Of Corporate Travel With Lanyon 06 Keeping Track of the Gains 09 Measurably Easier To Do Business With You 09 Conclusion: Boost Revenue From Corporate Travel
3 03 Introduction For hotel chains of every size, business travel makes an essential contribution to annual revenue. You need business travelers in your rooms. Does a time-consuming request for proposal (RFP) process and difficulty connecting with travel buyers limit your ability to secure corporate bookings? It s time for you to turn to the Lanyon solution. Lanyon helps you reach corporate travel buyers and increases your team s productivity in key areas that support corporate accounts. From driving more bookings to winning new accounts, a third-party research firm found that the Lanyon solution can deliver a three-year return on investment (ROI) of 393 percent. More than half of that ROI comes from m easurable revenue increases, with efficiency gains contributing the rest. This whitepaper examines how Lanyon helps hotel chains like yours improve their bottom lines and boost p roductivity across multiple processes all while keeping corporate travel buyers satisfied. Lanyon hotel customers experience a three-year ROI of 393 percent. The Business Case for an Automated Hospitality Spend Management Solution, Hobson & Company, 2014
4 04 Winning The Competition For Business Travelers Business travel is on the rise, with corporate travelers estimated to have spent more than $273 billion on travel in the U.S. alone in How many of those travel dollars did your hotels capture? No matter the size of your hotel chain, you can and must compete for corporate bookings. You ve got great properties in cities where business travelers need to be. And you re ready to go toe-to-toe with any hotel brand when it comes to quality and value. Success is a matter of reaching more corporate travel departments and making sure business travelers choose your properties. But inefficiencies such as workflows based on manual processes or outdated technology can leave you treading water despite your best efforts to get ahead. Think about RFPs; when it takes two to three days to process just one, how many can you really handle? An inability to manage and audit negotiated rates could also turn off corporate travel managers afraid of looking bad when the rates they negotiated are unavailable. To increase revenues from corporate travel, you need to be able to: Respond to more RFPs, and reduce the time spent on each one Win new accounts with businesses that send travelers to the areas you serve Load rates into global distribution systems (GDSs) faster and more accurately Drive more bookings with existing accounts by publishing appealing property details across channels You can t achieve these goals by hiring more people or working longer hours. Instead, you must automate and integrate the processes that drive your corporate travel program RFP response, GDS rate entry and rate auditing. You also need to get the attention of the businesses and travel buyers who would want to do business with you. Want a Bigger Share of the Corporate Travel Pie? Reach more travel buyers Respond to more RFPs in less time Keep travel buyers happy with better rate availability Publish appealing property details across channels 1 Joe Sharkey, An Economy on the Mend Lifts Corporate Travel, New York Times, July 15, 2013.
5 05 Take Control Of Corporate Travel With Lanyon The Lanyon solution integrates and automates key processes while putting your properties in front of corporate travel buyers. With content management, GDS access and new sales opportunities, Lanyon connects you to more than 900 corporations so you can secure new accounts, boost bookings and better serve existing clients. The Lanyon solution can help you: Win new accounts. Secure new accounts by reaching more corporate travel buyers and increasing the quality of your bids. Respond strategically to more RFPs. Automate key portions of the RFP process, and use market intelligence to set rates that are competitive. How do those benefits add up for hotel suppliers? At Lanyon, we ve seen hotel chains use our solution to boost revenue, efficiency and customer satisfaction. To quantify the results of these improvements, we engaged Hobson & Company an independent firm that specializes in determining the ROI of technology solutions. Attract travelers with accurate rates and property details. Quickly publish rates and detailed property information across multiple GDSs as you lower GDS-related IT costs. Improve rate compliance. Increase customer satisfaction and reduce the risk of selling rooms for less than agreed upon by automating the rate auditing process.
6 Keeping Track of the Gains 06 The analysts at Hobson studied U.S. and international hotel chains that use Lanyon, determining benefit measures in areas such as productivity improvement and new account revenue. Hobson then used these measures to calculate the ROI of the Lanyon solution for a representative hotel chain one with $40 million in annual revenue from 400 corporate accounts with each account generating an average of 100 room nights per year. For the purposes of this paper, we will call the representative hotel chain YRhotel. Hobson found measurable benefits in a number of areas. Revenue gains proved to be the leading value driver, with YRhotel seeing $980,000 in benefits from more bookings and better RFP processing. Returns from improved productivity and cost savings further increased ROI and enhanced rate compliance generated additional returns. In total, Hobson found that returns in these areas brought annual gains up to $1.2 million, for an overall three-year ROI of 393 percent. Hobson also calculated that the Lanyon solution completely paid for itself in just 4.9 months. Let s look more closely at how Lanyon users increase revenues by driving bookings while improving productivity. We ll use Hobson s YRhotel calculations to illustrate the benefits. Win New Accounts No matter how hard you work, there are always times that your responses to RFPs are unsuccessful. What if you could increase your number of successful bids? YRhotel did. According to Hobson, Lanyon helped boost the number of successful bids, by exposing YRhotel to more potential buyers. Those buyers also received higher-quality bids thanks to automatic checks for accuracy and completeness. This led to a 5 percent increase in the number of successful bids, driving $350,000 in revenue gains. Additional revenue gains came from YRhotel s improved ability to reach businesses. Corporations that use Lanyon have the option of receiving unsolicited bids and many do. YRhotel took advantage of this lead-generating tool to deliver unsolicited bids to likely businesses. Offering unsolicited bids added $100,000 in new business to YRhotel s bottom line. Prior to Lanyon, over 100 people would have to do content updates, one per hotel, to over 30 different extranets. These people were already very busy with other responsibilities as well, which could result in content not being updated in a timely manner. Director, Distribution
7 07 Respond Strategically To More RFPs Attract Travelers With Accurate Rates And Property Details As YRhotel increased its number of successful bids, its ability to respond to RFPs gained momentum. The Lanyon solution automates many aspects of the RFP p rocess; Hobson calculated that YRhotel reduced time spent on RFPs by 70 percent, generating $214,500 a year in productivity improvements. One hotel chain that Hobson studied in the course of its research cited RFP processing efficiency gains as a high as 90 percent. When RFP season ends, it s time to load all those negotiated rates into the GDSs so business travelers can book them a time-consuming process. YRhotel used the Lanyon solution to simultaneously push negotiated rates onto multiple GDSs, reducing loading time by 80 percent and generating more than $50,000 in annual productivity gains. Lanyon also provides users with visibility into market intelligence generated by the buyers and suppliers that connect through the solution. YRhotel accessed and compared average rates from hotel chains with similar properties, giving it better leverage during the RFP process. According to Hobson s analysis, this helped the chain secure higher rates from corporate accounts, resulting in $140,000 in annual revenue gains. The Lanyon solution has also transformed the way YRhotel publishes and tracks hotel content. Instead of re-keying property information into each GDS, the chain enters it only once, then Lanyon publishes it to multiple channels. This feature reduced time spent updating c ontent by 60 percent and eliminated the need to maintain individual GDS accounts. Moreover, YRhotel reduced GDS connectivity, hardware and software costs by 80 percent while cutting GDS-related IT support and training time by 50 percent. Lanyon did more than just make it easier and less expensive to publish content. YRhotel used the Lanyon solution to showcase its properties with enhanced listings. These more complete and appealing listings educated travel buyers about hotel locations, amenities, and special offers. Being able to publish easily to multiple distribution partners including travel portals, corporate intranets, and meeting planners increased channel exposure. The combined result: $140,000 in revenue gains. Increase Corporate Travel Revenues Lanyon helps hotel chains: Increase successful bids by 5 percent or more Reach more travel buyers with unsolicited bids Drive more bookings with enhanced listings and increased channel exposure Secure higher rates from corporate accounts
8 Improve Rate Compliance Fail to get negotiated rates into booking systems quickly, and you frustrate travelers, travel buyers, and the people who work at your properties. To deal with this, the Lanyon solution distributes rates directly to computer reservation systems, eliminating backlogs. Hobson found that Lanyon reduced the number of room nights affected by delayed rate loading by 50 percent. Accuracy greatly improved with Lanyon. With error-prone manual rate entry and audits, you may never know exactly how many incorrect rates are in your system. Travel buyers might notice and complain about rates that are too high. Meanwhile, rates that are too low get booked, costing you revenue. To address this problem, the Lanyon solution automatically checks an unlimited number of rate access codes and identifies issues. Hobson reports that YRhotel reduced the number of rooms booked at incorrect rates by 20 percent thanks to better, more frequent rate audits. Annual Productivity Gains Lanyon helps travel buyers save time with: 50 percent less time spent on the RFP process 70 percent faster hotel sourcing for projects 80 percent less time spent creating a hotel directory 08
9 09 Measurably Easier To Do Business With You Lanyon helps win new accounts and increase bookings while putting you in a better position to keep travel buyers happy. Devote the time Lanyon saves your team to higher-value tasks, including providing personalized service to key accounts. The customer satisfaction benefits of Lanyon go deeper, making it easier for buyers especially corporate travel buyers who use Lanyon to work with you. Hobson found that the Lanyon powered RFP process is more automated for buyers too. Corporate travel departments spent 50 percent less time on RFPs and travel buyers spent 80 percent less time creating hotel directories thanks to Lanyon. The Lanyon solution helps buyers source hotels for projects 70 percent faster than they would otherwise. Conclusion Boost Revenue From Corporate Travel You can compete with any hotel chain for corporate travel accounts and bookings, and there are corporate buyers who want what you have to offer. Lanyon helps you connect with them and avoid outdated manual processes. From faster, better RFP processing to getting hotel information to travelers, Lanyon drives the processes that help you increase revenue and productivity. The ROI wins documented by the analysts at Hobson prove it. How many more bookings will you see? Contact Lanyon to find out how we can help. About Lanyon Lanyon believes that when people come together amazing things happen, relationships are built and business gets done. This is why we have created the industry s leading cloud-based software for managing corporate meetings, events and travel programs. From a one-to-one sales meeting, employee training or a large flagship customer conference, Lanyon s unmatched software and the data it provides helps thousands of organizations and hotels around the world to better engage their customers, reduce costs and grow revenue. The proof of the results that we deliver is demonstrated by the customers that choose us, including over 80 percent of the Fortune 100, more than 10,000 small and medium businesses and over 100,000 hotels. For more information, please visit: info@lanyon.com
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