To understand more about this, Amadeus commissioned Hermes Management Consulting to research travel management practices in Western Europe (where markets are mature), and propose recommendations to optimise the travel and entertainment (T&E) budget. Negotiating hotel contracts and managing the accommodation selection is critical to this process. Objectives of the study The research project used primary data from focus group interviews to gain an in-depth insight into travel management practices and financials. By observing the travel procurement steps in a range of corporations and using activity-based costing analysis, Hermes have put together a series of recommendations to help corporations and their travel managers achieve important cost savings in T&E spend. Challenges Travel Managers face The report also highlights the many challenges that travel managers face in optimising the T&E budget: from external and internal economic pressures, to achieving widespread buy-in and compliance of corporate travel policies and Online Booking Tool (OBT) usage. In fact, a clear correlation was observed between OBT adoption and direct costs, making a strong case for companies to enforce travel policy, especially for OBT 'super-users' (on average, 16% of employees account for 80% of T&E spend). What proportion of average travel spend is on hotel stay? Amongst the 11 corporations observed in the study, air tickets accounted for 70% of total direct costs, with hotel stays making up the second largest travel spend for corporations. Developing agreements with hotel companies helped corporations achieve average hotel discounts of 16%, illustrating the importance of having a preferred hotel programme in place. It was also noted that in order to concentrate hotel bookings with preferred suppliers, participating hotels should be highlighted in the OBT, to ensure they achieve prominence on the hotel search display. Recommendations to optimise the T&E budget To assist Travel Managers with cost containment strategies, the white paper puts forward a series of recommendations. These include: improving internal processes (booking procedures, expense claim management, policy compliance), addressing travel procurement practices (increase use of low cost carriers, hotel programme participation, consolidating trips), introducing top-down enforcement of strict travel policy compliance and OBT training/adoption, and finally the implementation of analytical tools to measure and monitor essential Key Performance Indicators (KPIs) in travel policy management and spend. The message to hotel companies therefore is clear. Hotel programme participation helps corporations to focus their accommodation spend in properties which provide them with preferred rates. To assist with these negotiations, it is essential for corporate travel managers and hoteliers alike to have full visibility on booking figures and total accommodation spend, through shared data reporting. Finally, hotels should not underestimate the power of user-generated content (reviews, recommendations) when business travellers are selecting a property from within their allocated accommodation pool. Responding to both positive and negative reviews is important in maintaining the hotel's reputation and profile. Get the complete white paper at Amadeus