Business Travel News - Procurement Practices 2010 - (Page 17)

BTNonline.com NORTHSTAR now, it is looking more like a consumer-led recovery on a number of fronts, which is very different than what we’ve seen before,” Gilligan said. “In previous downturns, it was business spending that led into the decline in business.” He added, “In a sluggish economy, all the companies that we work for are going to be working incredibly hard to grow the top line. They’ve been able to manage the bottom line to some extent by cost-cutting, but that’s not sustainable over time. There is only so much cost you can cut out of the business and the process. You continue to reengineer, but it has to be about growing the top line, and critical to growing the top line is the role that business travel plays. It’s hard to imagine a successful large company that doesn’t invest in travel to grow the top line.” Meanwhile, New York University Tisch Center associate professor Bjorn Hanson, who followed Gilligan in speaking at the Strategic Travel Symposium, told attendees that hotel occupancies would increase in the next two years, but not by much. “Availability will stay sustainable for travel,” he said. “Room rates will decrease in 2010, be flatter in 2011 and not recover to 2007 levels for at least three years.” Upper-tier properties will see the largest rate decreases, Hanson said, as they fight with the midprice tiers to retain demand. Even as corporate travel volumes stabilize, with companies facing lower room night volumes than in the past, many are consolidating either with fewer properties or across their transient and group travel. Buyers should have one hotel per 500 to 700 room nights coming into a city, said Carlson Wagonlit Travel Solutions Group global project manager of hotel consulting Monica Eiden. When they are spread thinner than that, they lose significant negotiating leverage, she said. “If they’re not seeing room nights and revenue coming in, they’re not going to give anything back to you,” she said. Johnson & Johnson director of global travel and meeting services Maria Chevalier that her company in recent years has become more effective at consolidating group and transient hotel spend. Part of that has been due to getting a better handle on group data, but hotels also have made their sales staff more amenable to the strategy, she said. “Some of the larger hotel chains have restructured their sales organization to support that effort,” Chevalier said. “We have one individual supporting our account who is able to look at us holistically.” As hotels seek to boost occupancy, they become more receptive to agreements that allow corporations to use transient rates for group travel, Eiden said. “When the event comes up, they always have the option to say that they don’t have the capacity to take on the meeting, but that puts the hotel a step above another hotel that refuses,” she said. “If a transient program is going to be overflowing into the meetings program, being in that transient program is a huge benefit to the hoteliers.” w ROBERT G. SULLIVAN Executive Vice President/Group Publisher Tel: (201) 902-1956 Fax: (201) 902-1971 (rsullivan@ntmllc.com) • JOHN DEJESU, Advertising Director Tel: (646) 654-4461 Fax: (646) 654-4456 (jdejesu@btnonline.com) MIDWEST/WEST/INTERNATIONAL EDIE GARFINKLE, Advertising Director Tel: (805) 383-1326 Fax: (646) 390-7759 (egarfinkle@btnonline.com) CANADA CYNDY FLEMING, Publicitas APR Tel: (416) 363-1388 Fax: (416) 363-2889 MEXICO/LATIN AMERICA VERONICA CASTRO, Cass Media Tel: 5255-5605-1757 JAPAN HIROKO KUJIME, Pacific Business Inc. Tel: 81-3-3661-6138 Fax: 81-3-3661-6139 KOREA JUNG WON SUH, Singesi Media Tel: 82-2-3275-5969 Fax: 82-2-785-8225 MALAYSIA/PHILIPPINES/THAILAND ANNIE BLANCHARD Tel: 632-646-2497 Fax: 632-647-1853 SINGAPORE LAVENDER TAN, A1 Media Tel: 65-6469-9321 Fax: 65-6469-8028 • MARKETING CATHERINE MARCHESE, Marketing Manager Tel: (646) 654-5131 (catherine.marchese@nielsen.com) SUBSCRIPTION SERVICES Tel: 847-559-7533 800-697-8859 Toll Free Fax: (847) 291-4816 Business Travel News PO Box 3601 Northbrook, IL 60065-3601 (nbtn@omeda.com) LIST RENTAL/POSTAL INFORMATION JULIUS SINGLE (845) 731-2731 E-MAIL INFORMATION WAYNE NAGROWSKI (845) 731-3854 CUSTOM REPRINTS OF 500 PIECES OR MORE KRISTI FULKERSON, The YGS Group (800) 290-5460 ext. 144 (BTN@TheYGSgroup.com) PRODUCTION JOHN SARTORIS, Group Production Director Tel: (646) 654-7294 Fax: (646) 654-7318 NOAH KLEIN, Production Manager Tel: (646) 654-5179 Fax: (646) 654-7318 BTN EDITORIAL & SALES OFFICES 770 Broadway, New York, NY 10003-9595 All Rights Reserved Estimated trip rise* 2010 2009 2008 2007 * For those increasing trips 16% 18% 12% 13% Estimated annual travel spending rise* 2010 2009 2008 2007 * For those increasing spending 17% 17% 12% 13% Number of trips planned for this year compared with last year 20% 14% 43% 66% 48% 36% 21% 35% 18% 39% 15% 46% NORTHSTAR TRAVEL MEDIA LLC Chairman and Chief Executive Officer: Thomas L. Kemp Chief Financial Officer: Linda Davachi 2010 More 2009 Fewer 2008 Same 2007 www.BTNonline.com // BUSINESS TRAVEL NEWS // April 19, 2010 17 http://www.BTNonline.com http://www.BTNonline.com

Table of Contents for the Digital Edition of Business Travel News - Procurement Practices 2010

Business Travel News - Procurement Processes 2010

Contents
Letters to Our Readers
Ebbing of Procurement Tide
Reining in Disciplinary Measures
Managing Demand and Structure
Evaluating 2010's Travel Outlook
Negotiating the Role

Business Travel News - Procurement Practices 2010