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HRS’ new Global Sourcing Study offers travel buyers the right mix to make substantial savings

Hotel Solutions Provider, HRS, has released a new Global Sourcing Study that looks in depth at the hotel procurement process and how travel buyers could make substantial savings by simply reviewing the effectiveness of their programmes.

This is the fourth in a series of papers published by HRS which aim to explain the essential elements of any robust corporate hotel programme. The study is based on responses from more than 100 customers in nine markets worldwide and looks at their buying behaviour, strategies and remedies for more efficient procurement, as well as the obstacles they are facing.  

The study considers the benefits associated with consolidating the sourcing process by working with a third party and how leveraging a single platform to tackle the entire procurement chain could drive greater efficiencies, improved visibility and ultimately greater savings.  

Jon West, Managing Director for HRS in the UK and Ireland, commented: “Last year, £216 billion was spent on hotel overnight stays, accounting for 27 per cent of total travel costs. Subsequently, travel managers are increasingly starting to realise that by accessing data and consultation service on an annual basis they can really optimise their hotel procurement.  

“Each year, companies worldwide waste a savings potential of about 20 billion pounds on hotel procurement because negotiations are mainly carried out by companies themselves, instead of by external procurement experts who have an overview of the overall hotel market. Consequently, a large part of the hotel market is simply left out.  

“For example, chain hotels amount to approximately 45 per cent of the negotiated hotel volume – in 28 per cent of all companies, this share even amounts to 70 to 100 per cent. Due to insufficient resources, analysis tools and benchmark data, a lot of travel buyers are deterred by individual hotels, even though these have the biggest share in the worldwide hotel market, with 88 per cent in Europe and 95 per cent in Asia, which simply does not make good business sense.  

“This study shows the essential aims and challenges of those responsible for hotel procurement, the enormous potential for optimisation and how companies can achieve it. The study also aims to illustrate how, by reviewing sourcing strategies, travel buyers can reduce internal processing time, increase employee satisfaction and unlock potential savings.”

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