Client Consulting - Expedia...32 | Egencia Confidential Policy – Tactics for success 1. Mandate use of corporate agency 2. Policy will be enforced at time of booking via online booking

2 | Egencia Confidential

Corey Hance Client Consulting Services Manager

Egencia

Meet Today’s Speakers

Jenny O’Brien Moderator Egencia

Shani DeSantis Account Manager

Egencia

Lana Yoshii Vice President Smith Travel

Research


Agenda

  A Word from our Sponsor   Meet our Panel   Hotel Market Environment – Transient and Groups   Policy and Education   Negotiating Opportunities   Importance of Monitoring   Your Questions   Winners Announced





Lodging Industry Overview

Lana Yoshii Vice President Smith Travel Research

Global Performance



Europe € YE 08 YE 09 -‐5.1% -‐16.7%

ME & A US$ YE 08 YE 09 17.0% -‐13.3%

Asia Pacific US$ YE 08 YE 09 1.8% -‐19.4% United States US$

YE 08 YE 09 -‐1.8% -‐16.7%

UK £ YE 08 YE 09 -‐0.4% -‐8.3%

2010 Smith Travel Research, Inc.

Double Digit Revenue Losses Across the Globe REVPAR Percent Change | Year End 2009


London Maintaining Strongest Occupancy Occupancy Percent – Major Non-US Markets | Full Year 2009



Dubai Reports Strong Rates ADR (US$) – Major Non-US Markets | Full Year 2009


U.S. Performance



Demand Losses Are Improving Room Supply/Demand Percent Change – Total US Twelve Month Moving Average – 1989 to January 2010



Profitability Still a Struggle Key Performance Indicators Percent Change – Total US Twelve Months Ending January 2010



Upper Upscale with Strongest Occupancy Levels Occupancy Percent – US Chain Scales Twelve Months Ended January 2010

% Chg. -6.8 -5.6 -7.0 -10.8 -9.5 -8.8 2010 Smith Travel Research, Inc.


Luxury Has Discounted the Deepest Average Daily Rate (In Dollars) – US Chain Scales Twelve Months Ended January 2010

% Chg. -16.7 -12.0 -10.6 -6.2 -5.8 -7.3 2010 Smith Travel Research, Inc.


Midscale with F&B Reports Deep Declines in Demand Supply/Demand Percent Change – US Chain Scales Twelve Months Ended January



Boston Bouncing Back Occupancy Percent Change – Key US Markets | January 2010 YTD



Major Markets Continue to Discount ADR Percent Change – Key US Markets | January 2010 YTD


U.S. Development Pipeline



Supply Growth Slowing to a Moderate Pace Total US Active Development Pipeline - Rooms Change From Prior Year

Jan 2010 Jan 2009 Change % Chg

In Construction 88,470 190,092 -101,622 -53.5%

“Planned” Pipeline 289,675 400,115 -110,440 -27.6%

Planned Pipeline includes projects in Final Planning and Planning phases

Source: STR / TWR / Dodge Construction Pipeline


New York Expecting a Surge in New Hotel Rooms January 2010

Market # Rooms U/C % Existing Supply

New York 10,690 11.8

Houston 3,362 4.8

Washington, DC 2,474 2.4

Dallas 2,250 2.9

Atlanta 2,085 2.2

Orlando 1,592 1.3

Las Vegas 1,461 0.9 Source: STR / TWR / Dodge Construction Pipeline

U.S. Lodging Industry Projections



Unemployment Expected to Remain High US Economic Outlook - Blue Chip Economic Indicators | Feb 2010

2009 2010F 2011F

Real GDP -2.5% +3.0% +3.1%

CPI -0.4% +2.2% +2.0%

Corporate Profits -5.8% +14.5% +8.8%

Disp. Personal Income +1.0% +2.1% +2.6%

Unemployment Rate 9.3% 10.0% 9.2%



Strong Demand Growth Expected in 2011 Supply/Demand Percent Change – Total US | 2004 – 2011P



Occupancy Predicted to Grow in 2011 Occupancy Percent – Total US | 2004 – 2011P


% Chg. 3.5 2.8 0.3 -0.5 -4.6 -8.7 0.0 2.2


ADR Growth Expected in 2011 Average Daily Rate (In Dollars) – Total US | 2004 – 2011P

% Chg. 4.2 5.6 7.6 6.4 2.8 -8.8 -3.2 2.0 2010 Smith Travel Research, Inc.


Profitability Expected to Improve in 2011 RevPAR Percent Change – Total US | 2004 – 2011P

20 Year Average: 2.1%


Opportunities and Tactics

Shani DeSantis Account Manager Egencia


Opportunities in 2010

1.  Policy and education   Foundation for program success

  Mirror corporate culture

  Guidelines for acceptable spending

  Reinforcement = higher compliance

2.  Negotiating Tactics   Focus on strength and policy management

  Focus on ability to drive spend to preferred suppliers at time of booking

  Incremental revenue opportunities for hotel(s) and/or chains

  Past performance is not always indicative of future behavior


Policy – Tactics for success

1.  Mandate use of corporate agency 2.  Policy will be enforced at time of booking

via online booking tool and/or travel consultants

3.  Policy should apply to all employees, contractors and vendors that are being reimbursed by the company

4.  Implement per diems and city wide spend caps

5.  All non-preferred hotels will be considered out of policy

6.  Approvals required for bookings outside of corporate policy


Importance of Education

Buy-In Education Feedback Compliance

 Management buy-in and executive support is the key to success

 Engage key stakeholders and frequent travelers from the beginning

 Buy-in is an ongoing process

 New employees should be engaged from the beginning

 Important policy changes may require additional education

 Provide a centralized resource for ongoing information – Intranet, website

 Help employees understand that compliance is the key to meeting financial goals

 Make goals realistic to increase compliance

 Consistently reinforce the policy

 Put mechanisms in place to garner continuous feedback

 Leverage reporting and data for additional insight

 Ensure the feedback loop is complete


2010 Negotiating Tactics

1.  Understand market-specific dynamics 2.  Strict policy management and support of negotiated rates

is key 3.  Include amenities into the rate whenever possible 4.  Consolidate wherever possible to increase leverage 5.  Include both full and limited service hotels in the program 6.  Negotiate more favorable terms and conditions 7.  Consider independent hotels


When to consolidate

1.  Analyze total hotel spend in each market and on a regional basis   Consolidate one hotel for every 250 room nights or US $10,000 at a

particular property

2.  Be realistic about consolidation goals   It does not happen overnight… it takes 6 months to see progress

3.  Consider consolidating to one full-service hotel and one limited-service hotel for each market   Properties one tier down = proven savings

4.  Be prepared and have a back-up plan for city-wide sell-outs

Negotiations Strategies

Corey Hance Client Consulting Services Manager Egencia


When not to negotiate

1.  Room night caps per city

2.  Minimal resources to manage program 1. Average hotel RFP = 16 weeks from start to finish 2.  Individual property agreements require maintenance

3.  Travel policy does not have clear guidelines. 1. Will not be able to drive spend to preferred partners

4.  Program is in flux. 1. M&A; divestitures

2. Project-based travel (e.g. consulting firms)

3. Follow 80/20 rule


Lean on your Travel Management Company   The negotiating power of your TMC can deliver strong savings

  TMCs have resources to monitor rates and adjust for seasonality and other changes in demand

  Corporate discount agreements are often negotiated on annual basis. Rates are not dynamic

Market Discount from Published Rate

Downtown Chicago 26% Off Downtown Manhattan 16% Off Arc de Triomphe properties, Paris 35% Off Downtown Toronto 17% Off Heathrow Airport 14% Off


Importance of Monitoring

Combine multiple reports to get a holistic view of hotel spend   Corporate Card Data

  Agency Reporting

  Specific hotel reports

Thank You! A recording of this webinar will be made available on Egencia.com

Documents

Client Consulting - Expedia...32 | Egencia Confidential Policy – Tactics for success 1. Mandate use of corporate agency 2. Policy will be enforced at time of booking via online booking