LODGING MARKET INSIGHTS REPORT PROCUREMENT
SEASON 2023

The rise of app-fueled millennials in business travel has given birth to a new trend: the workation. More than 78% of these travelers now combine business trips with leisure activities, demanding boutique-style accommodations and personalized experiences. To retain these travelers within your corporate program, offer flexibility and diverse choices that cater to their preferences, ensuring higher program adoption rates and minimizing leakage.

With the growing acceptance of remote work and digital nomads, hotels are no longer limited to transient business trips. Procurement managers need to incorporate single-person workspaces, team workspaces, and flexible meeting spaces into their hotel programs. By adapting to the changing needs of travelers, you can create a comprehensive program that supports both transient and extended stays.

Businesses are now adopting a more purposeful approach to travel, eliminating unnecessary trips and focusing on optimizing stays. The demand for longer stays has increased significantly, with 18% of business trips in 2023 lasting 8 nights or more. Negotiating long stay rates can lead to average savings of 7% and should be included in your addressable spend to maximize program flexibility and achieve better rates.

Responsible procurement and sustainability are no longer optional but strategic imperatives. Regulatory requirements for reporting Scope 3 emissions and a focus on ESG performance demand that hotels demonstrate strong sustainability practices. From energy and water footprints to social and governance aspects, a comprehensive sustainability strategy is crucial for both environmental and social responsibility.

Duty of Care extends beyond environmental concerns to encompass the well-being and safety of travelers. Procurement managers must curate programs that align with their organization’s CSR goals, considering factors such as mental health support, security for different traveler groups, accessibility, and amenities. Level 4 data, which includes sustainability metrics, is essential for sustainability reporting and aligning procurement with ESG goals.

The fragmented supplier distribution channels and data landscape make it challenging to have a single source of truth for your travel data. To optimize your program’s value and offset market price developments, leverage artificial intelligence (AI) and automation tools for pricing, solicitation, and negotiation. Continuous procurement and converging all lodging spend can deliver significant savings, efficiency, and transparency while enhancing program performance.