Travel managers are trying to keep up with changes in technology and travel preferences, but travelers have taken the lead. Just how commanding a lead depends on how quickly travel managers adapt to change.
That’s according to Jon Wohlfert, executive vice president of sales for Extended Stay Hotels. This week Wohlfert presented a preview of a white paper from Extended Stay Hotels, due out next month, at the Association of Corporate Travel Executives Global Education Conference in San Francisco.
Travel managers are missing key trends, he said.
Take something as basic as travel policy communication. The typical travel manager uses, on average, 3.4 different electronic tools to communicate with travelers, in the effort to ensure that travelers are familiar with policy before they travel.
“Yes, travel managers are using current technology and tools,” Wohlfert said. “But there’s a gap. A glaring gap.”
Among corporate travelers surveyed for the white paper, 84% reported using mobile technology for travel. But among corporate travel managers, mobile use was just 7%.
Social media gap
The gap in social media isn’t quite as deep, but it’s still striking. Social media is used by 38% of corporate travelers versus 19% of travel managers.
Age plays a powerful role. Not surprisingly, the younger the employee, the higher the use of social media.
“We are going to be forced to adopt these technologies whether we want to or not,” Wohlfert said. “If you want to communicate with your employees, you have to use the vehicles they use – not expect them to cater to your habits.”
Failing to track spend
Travel managers face different challenges when it comes to extended stay hotels. The big problems are tracking and control of spend.
Most companies in the survey reported using extended stay hotels, although travel managers define “extended stay” differently – anywhere from five consecutive nights at the same property to a minimum of 30 nights.
But nearly half of companies, 42%, reported that responsibility for booking and paying for extended stay nights was spread across an average of 4.7 departments.
Travel was responsible for a share of extended stay, but so were human resources, real estate, IT, training, procurement, and a variety of other departments.
Falling through the cracks
“Extended stay is clearly a hotel product that should fall under travel,” Wohlfert said. “Instead, it has fallen through the cracks at many companies. We found that multiple departments are booking extended stay products without regard to travel policy or travel department spend.”
Just how big the crack is depends on the company. The average travel department spent $1.8 million annually on extended stay.
Large companies reported spending $7.5 million on extended stay nights.
But “that $7.5 million is just the travel spend that we know about,” Wohlfert said. “At this point, we don’t have any real estimate of the rogue spend.”
Survey results show that nearly all travel managers (98%) are satisfied with the cost of extended stay, Wohlfert said. And almost as many travelers (92%) are satisfied with the quality of the extended cost stay.
But what happens to that balance between cost and satisfaction in the future, as rates rise?
Hotel rates are set to rise by about 10% during 2012 and 2013 compared to 2011 levels. It is likely that extended stay rates will rise along with the general hotel market, he said.
There is no reason for travelers to suddenly become dissatisfied with the long-stay experience, Wohlfert said. But rate increases could prompt travel managers to steer travelers away from a product with high satisfaction, which would dampen traveler compliance.