Carlson Wagonlit Travel's (CWT) latest white paper shows that Marriott's acquisition of Starwood is set to change the hotel industry significantly and advises corporate travel buyers to start thinking about implications now and begin planning for future changes.
Scott Brennan, CWT EVP and Head of Global Supplier Management, said, "Consolidation in the hotel industry isn't new but the Marriott/Starwood tie-up is likely to change the way corporate travel is bought and sold. Everyone has to think very carefully about what this means for negotiating corporate travel deals."
In 14 of the world's top 20 cities, the new hotel group will have nearly a third of the corporate travel hotel spend, which rises to half in some destinations. CWT's analysis suggests Marriott, more than any other chain, has chosen not to take part in corporate travel RFP processes.
"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." said Brennan.
CWT's analysis shows 22% of non-compliant spend is with Marriott and nine percent is with Starwood and, according to a 2015 GBTA survey, loyalty programmes are one of the underlying reasons for non-compliant hotel spend.
At this point, it's unclear whether Marriott will make any changes to its own or Starwood's loyalty programmes. "Our advice is to start planning now for travel programme negotiations. The more prepared you are, the better the deals you will be able to strike."
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