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Business Travel: Companies Waste $500 Million Annually In Hotel Spending

July 8, 2009 By: George Dooley

American Express Business Travel estimates that companies are collectively wasting half a billion dollars annually by failing to strategically manage their hotel programs. To help identify whether or not companies are optimizing 100 percent of this travel and entertainment (T&E) category, American Express is offering a complimentary hotel program assessment that will determine if companies are paying the right price, spending for the right reason and spending the right way.

Missed savings opportunities cited by AEBT include: an average of 22 percent of travel bookings are non-compliant with corporate policy; nearly 40 percent of air bookings with an overnight trip do not include a hotel booking; and mid-sized companies can save 10-15 percent off best available rates through preferred supplier programs.

“Most companies currently are not fully realizing the benefits of a well-sourced hotel program,” said Hervé Sedky, vice president and general manager of Global Advisory Services, Corporate Meeting Solutions and Global Business Partnerships for American Express Business Travel. “Negotiating discounted hotel rates is only one aspect of strategically managing this T&E category. Companies also need to focus more on improving traveler compliance, ensuring discounted rates are loaded correctly and offered at the point of sale and confirming travel is aligned with business goals.”

Based on the findings, American Express will offer participating companies recommendations on how to more effectively manage this area of spend. The company also announced two new hotel management solutions: Complete Suite by Preferred Extras program and hotel eXpert, both aimed at providing companies a hotel program that meets their individual needs and drives savings. Finally, companies that participate in the assessment will also receive a new white paper developed by American Express’ Advisory Services group that offers expert insight into how to effectively manage this T&E category.

To assist companies in determining whether or not they are strategically managing and optimizing their hotel program, American Express Business Travel is offering companies a chance to evaluate the effectiveness of their hotel program through a new free assessment. By reviewing the principles of right price, right reason and right way, companies will be fitted with recommendations on how to best structure a hotel program that meets their needs and closes any savings gaps. To initiate the assessment, companies should visit the American Express Business Travel online community at and click on “Hotel Program Assessment.”

“By negotiating guaranteed discounted rates otherwise unattainable for mid-sized companies, they will no longer have the stress of the RFP process and can generate a much higher net effective discount across properties,” said Sedky. “Further, Complete Suite provides these discounts to companies that spend under $10,000 annually on hotels, which is a significant differentiator as most programs require minimums larger than this amount for just one hotel chain.

“Companies no longer have the financial flexibility to overlook potential cost savings associated with a loosely managed hotel program,” added Sedky. “By implementing a few policy and compliance changes, utilizing turn-key solutions and tools like Complete Suite, and sharpening sourcing practices to make sure they are truly strategic, companies of all sizes have the potential to drive a significant piece of revenue back to the bottom line.”

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By George Dooley | July 8, 2009
American Express Business Travel offers free assessment tools to help optimize travel expenses.
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