Marwood worries CWT which urges corporates to rethink negotiations

scott-brennan
Scott Brennan, CWT’s executive vice president and head of global supplier management

MARRIOTT International’s acquisition of Starwood Hotels & Resorts worries Carlson Wagonlit Travel (CWT) which has urged corporate travel buyers to think how it will change their travel programmes.

It pointed out that in 14 of the world’s top 20 cities, the new hotel group will have nearly a third of the corporate travel hotel spend, rising to half in some places. Also, CWT’s analysis suggests Marriott, more than any other chain, has chosen not to take part in corporate travel RFP processes, it said.

Scott Brennan, CWT’s executive vice president and head of global supplier management, said: “The implications are potentially huge. We think the new Marriott/Starwood group is going to have a lot of say in the market, which could alter the way corporate rooms are bought and sold. We don’t yet know the full impact and because the new group won’t be finalised in time for the negotiations this year, we won’t know until the 2017 negotiating season, in September next year.”

A further consideration is travel policy compliance, travel buyers’ key negotiating tool as they can drive volume to preferred properties. However, CWT’s analysis shows 22 per cent of non-compliant spend is with Marriott and nine per cent is with Starwood.

Brennan continued: “According to a 2015 GBTA survey of corporate travel managers, hotel chain loyalty programmes is one of the underlying reasons for non-compliant hotel spend. We don’t yet know what changes, if any, the new Marriott will make to its and Starwood’s loyalty programme. But whatever happens, the new group already accounts for a large share of non-compliant spend.

“The combination of the new Marriott’s increased market share and the pulling-power of its loyalty programme means it will be in a very strong position. After all, volume drives the discussion in the hotel industry. On top of that, where a player the size of the new Marriott goes, others will follow.”

CWT suggests corporate travel buyers take four steps now to start building their negotiating position:

  1. Assess key markets: look at share by top chain within key cities or areas within a city, assess alternative hotels and potential savings
  2. Prepare to have a more flexible approach for 2017, incorporating alternative suppliers as required
  3. Adapt your travel policy to ensure compliance
  4. Communicate to travellers, engage them in corporate objectives and create shared ownership in the results.
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