TRANSFORM YOUR HOTEL PROGRAM USING LANYON As a corporate travel manager, you face constant pressure to keep travel costs down. Yet inefficient hotel sourcing, inadequate negotiating leverage, and noncompliant bookings can make success virtually impossible. The Lanyon Total Hospitality Marketplace puts you in more complete control of your processes with better sourcing, tools to enforce compliance, and intelligence that enhances rate negotiations. Hobson & Company, a third party research firm, determined that these benefits add up to compelling return on investment (ROI) numbers, with a three-year ROI of 448 percent readily achievable. This white paper explores how Lanyon helps corporate travel managers like you get their jobs done faster and more effectively while generating measurable cost savings. 1
TAKING CHARGE OF HOTEL SPEND STRATEGICALLY SPENDING TOO MUCH ON HOTELS? You want: The best deals from hotel suppliers Travelers to choose hotels from the preferred list Lower overall hotel costs If you re like many corporate travel managers, you scramble just to keep on top of your hospitality program making it hard to focus on strategically reducing costs. The hotel RFP (request for proposal) process eats up several weeks of your team s time each year, with much of that time spent on data entry. Then, you work to get information on preferred hotels to travelers. And those travelers too often spend just a few minutes exploring preferred hotels only to book where they please. Executives outside the travel department who glance at the (occasionally) great rates offered on consumer sites may even question the value of your program altogether. They ask: Why do we spend so much time negotiating higher rates than what I see on travel sites? Frustrating? Absolutely. But most likely you re too busy to do much about it. Despite these challenges, you must: Source and secure the best deals from the right suppliers The RFP process has grown to include ever more suppliers, even as negotiating leverage shrinks due to increased business travel. Increase traveler compliance and satisfaction Having great rates isn t a benefit if travelers don t stay at the properties in your program; you need to get complete, accurate, and appealing hotel information to travelers. Support the company s travel needs by lowering overall hotel costs If you lack an efficient way to assess whether you re getting the best rates or to audit your program, you can t spot opportunities for improvement. Managing a hospitality program that relies on disconnected systems and manual data entry puts you at a disadvantage. That s because it s hard to complete the tasks listed above and consistently steer towards lower costs. You need visibility into and control over your processes to truly take charge of your hotel program. RFPs show how inefficiencies in just one key area can derail success. With disparate systems, each RFP can take as long as two days to process. This is a huge time drain. And it limits the number of suppliers you can effectively solicit, which reduces your ability to get the best pricing. Fewer suppliers 2
can mean less availability and reduced traveler compliance. Less integrated data may make it difficult to convey hotel details to travelers, reducing compliance even more. The RFP process is just one area. Disconnected processes hamper everything from meeting management and rate audits to helping travelers reduce bookings at premium rates. Achieving each of the goals above requires control over and visibility into every aspect of your hotel program. REDUCING COSTS WITH CONTROL AND VISIBILITY Prior to Lanyon, Excel spreadsheets would be received from suppliers and would have to be uploaded into the system manually. In addition, all RFPs would have to be updated individually, as there was no way to do a mass update across all RFPs. Industry Consultant The Lanyon Total Hospitality Marketplace provides the integrated visibility and control you need to reign in hotel costs. More than 800 corporations use the Lanyon solution to connect with more than 340 hospitality brands. The result is a powerful and automated RFP process. However, the Lanyon solution for travel buyers extends far beyond sourcing with: Powerful spend management: Lanyon consolidates every aspect of corporate hospitality spend, including transient sourcing, meetings and events, engagements and projects, and rate integrity. Deep intelligence into the hospitality market: You access real-time market and pricing analysis that lets you benchmark the rates you re receiving; a rate parity tool delivers visibility into rates on consumer sites. Rate integrity enforcement: Automate rate audits to make sure you re getting the correct rates and to help prevent overpaying due to lack of availability. Lanyon helps you get the best hotel rates while saving time thanks to efficient processes. With Lanyon, your team spends more time on highvalue tasks, such as using better visibility to spot opportunities to lower travel spend even more. At Lanyon, we wanted to determine the time and cost savings companies experience as they use the Lanyon solution. To get an independent perspective, we turned to Hobson & Company, a firm specializing in quantifying the ROI of technology solutions. 3
The analysts at Hobson studied 12 U.S. and international organizations that rely on Lanyon. Through interviews with travel sourcing leaders, Hobson determined average ROI measures in a number of areas, including improved sourcing, stronger negotiations, rate integrity, and data management. Hobson then used its analysis to calculate the ROI of the Lanyon solution for a hypothetical company, which we will call Advisory Global. With US$50 million in annual hotel spend, Advisory Global books an average of 250,000 nights annually and processes 500 RFPs each year. Hobson calculated that Advisory Global could receive an ROI of 448 percent over a three-year period. And realize payback on its investment in Lanyon in just 4.2 months. How do those numbers translate into dollars and cents? Hobson determined that Advisory Global would realize a three-year net present value of $1.5 million. Let s look more closely at how Lanyon users achieve cost savings and efficiency gains as they improve the way they manage their hospitality programs. MEASUREABLE COST SAVINGS Using Lanyon led to significant cost savings thanks to improved sourcing, increased traveler compliance, and better support for travel priorities. IMPROVED SOURCING TOO LITTLE CONTROL OVER HOTEL COSTS? You need: Spend management visibility A window into the hospitality market Automated rate audits It s difficult to have a successful hospitality program without having a successful RFP process. With Lanyon, travel buyers found they had more control over negotiations with suppliers. After receiving bids through Lanyon, buyers were able to negotiate portions of bids easily, rather than accepting high prices or rejecting bids altogether. Advisory Global saw a 1 percent improvement in negotiated rates thanks to Lanyon, which translated into a $75,000 cost savings. Some companies in the Hobson study reported improvements in rates of as much as 5 percent. Lanyon users were also able to overcome one of travel buyers biggest headaches: lower prices on consumer sites. By automatically checking contracted rates against consumer sites, Advisory Global reduced the number of rooms booked at premium rates by 75 percent. 4
LOWER HOSPITALITY SPEND Lanyon helps travel buyers realize: Rates that are as much as 5 percent better 75 percent reduction in rooms booked for premium rates 5 percent better overall traveler compliance Measurable reductions in overall hotel spend INCREASED RATE AND TRAVELER COMPLIANCE Great hotel rates aren t great if your travelers don t book them or worse, can t access the preferred hotel rooms/rates. Travel buyers who lack automated auditing tools don t have an easy way to spot rate entry errors that make it impossible for travelers to book the right rates. A study reported in Amadeus: Smart Mobility Management in 2013 estimated that between 25 and 40 percent of negotiated rates are either loaded incorrectly or not loaded at all into booking systems. Lanyon enables automatic rate auditing, ensuring negotiated rates are fully and accurately loaded. What happens when the correct rates are available to travelers? Hobson determined that Advisory Global reduced noncompliant booking by 75 percent. The company also reduced the number of rooms booked at premium rates due to lack of availability by 75 percent. Of course, preferred hotel information needs to be accessible and appealing to travelers. Travelers not finding the right mix of location and amenities on the preferred hotel list may be the biggest obstacle to compliance. Such travelers often book at premium rates based on their preferences. Lanyon helps companies assemble complete and easy-to-use hotel directories, leading to a 5 percent improvement in compliance with the preferred hotel list. Better compliance leads to impressive savings. The rate audits that made it easier for travelers to find the correct rates along with improved compliance with the preferred hotels list added up to more than $315,000 in cost savings for Advisory Global. LOWER OVERALL HOTEL SPEND As mentioned earlier, lowering overall hotel costs is likely your overarching goal. Hotel sourcing and traveler compliance can make huge contributions towards that goal, but there are many smaller contributors. For instance, penalties on things like missed meeting contract dates add unnecessary spending to a travel program. Hobson noted that Advisory Global reduced the number of such penalties by 95 percent. The visibility Lanyon delivers helps you stay on top of more than just deadlines. You can also use it to benchmark rates received from suppliers. Real-time market and pricing analyses are driven by comparisons of rates offered across suppliers and rates averaged from all of Lanyon s corporate 5
accounts. Visualizations that include maps, scorecards, and drill-down analytics help you negotiate with suppliers. Advisory Global reduced overall hotel spend by 1 percent thanks to benchmarking adding up to $500,000 in cost savings. Benchmarking had a bigger impact at other companies Hobson studied, with some reporting overall savings in excess of 5 percent annually. MEASURABLE OPERATING EFFICIENCIES 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 The benefits delivered by Lanyon solutions extend beyond just cost savings. They save you and your colleagues staggering amounts of time. Hobson measured the productivity improvements users reported, and linked them to the salary-based value of employee time. The savings added up to more than $407,000 in productivity improvements for Advisory Global. Thanks to Lanyon, Advisory Global reduced time spent on the annual RFP process by 50 percent. That number is particularly impressive considering, as noted above, that the faster process reduced overall hotel spend, too. Time spent sourcing hotels for meetings fell by 30 percent, and sourcing for projects plummeted by 70 percent. The company s travel team leveraged the Lanyon solution to create a better hotel directory in 80 percent less time. While Hobson did not quantify the value of what employees did instead of wasting energy on the most tedious parts of travel management, it s fair to assume that the company was able to devote more resources to higher-value tasks. 6
CONCLUSION: FIND YOUR ROI Disconnected processes and lack of automation can stand in the way of a successful hotel program. The inefficiencies inherent in such an approach simply waste too much time and prevent you from managing your program proactively. From sourcing the right hotels at the best rates to improving traveler compliance and more, you re constantly scrambling instead of working strategically. Lanyon is the answer. CONTACT US Lanyon (Corporate Headquarters) 104 Decker Court Suite 200 Irving, TX 75062 +1 817 226 5656 sales@lanyon.com With Lanyon, you take control of many of aspects of your hotel program while improving your ability to get the best rates. Lanyon helps you source hotels, negotiate better rates, reduce noncompliant bookings, and audit rates for accuracy. At Lanyon, we were confident that Lanyon tools delivered efficiencies and real cost savings. We engaged Hobson, an independent research firm, to examine the results our customers realize with Lanyon. The benefits add up, with Hobson s ROI model determining that a company with average benefits sees a three-year ROI of 448 percent. How much can you save? Contact Lanyon today for an ROI analysis based on your company s specific travel needs and the Hobson methodology. Follow us on Twitter: @Lanyon Lanyon is the leading provider of cloud-based software for the Meetings and Events industry, and Transient Hotel Programs. Leveraging more than 40 years of industry experience, the Company enables thousands of associations, Small to Mid-sized Businesses and enterprise organizations around the world to drive efficiency, engagement and growth from their meetings, events and travel investments. over 80% percent of the Fortune 100, including 10 of the top 10 technology companies, financial services companies, and pharmaceutical companies, as well as 10 of the top 10 hospitality companies. For more information, visit www.lanyon.com. 7