FirstGroup, the UK based passenger company, is one of Inntel’s largest clients. The company has a comprehensive travel policy that includes a preferred hotel programme covering 30 city locations, and more than 300 people are responsible for booking travel and accommodation for FirstGroup employees.

While Inntel had negotiated special rates with all of the preferred hotels, FirstGroup’s bookers were still permitted to book off the list – and routinely did so. By June 2011, just 73% of their London based bookings were in the preferred hotels.  We flagged the need for greater compliance with the FirstGroup travel policy, and we were charged with raising the compliance level for London hotels to at least 80%.

Solving problems

Inntel analysed FirstGroup’s London bookings and discovered that some of the hotels on the preferred list were only honouring the negotiated rates during periods of low demand. FirstGroup’s bookers were therefore looking for more attractive rates elsewhere, and spreading their business across more than 70 hotels.

This resulted in a lose/lose situation. FirstGroup was not benefiting from any favourable treatment, and the hotels concerned were losing a large chunk of the company’s 3000 room nights a year.

Inntel immediately renegotiated terms with the London hotels on the list. In exchange for a guaranteed allocation of FirstGroup’s business, the hotels agreed to keep rate increases to a minimum and to make the preferential rates available during busier times.

Adding value

During the negotiations, Inntel was able to arrange additional benefits for FirstGroup. For example, one of the most popular hotels agreed that it would keep the FirstGroup rate available until it reached full occupancy. This is a rule the hotel does not apply to any other client. To further encourage compliance, Inntel has also helped FirstGroup to implement an amendment to the company’s travel policy. if a booker now wishes to book a hotel off programme even though a preferred hotel/rate is available, the department’s managing director must approve the spend.

“Inntel has shown that the agency is big enough to command great rates but small enough to be agile. We enjoy a very proactive, personal and flexible relationship.”

Carol Jones – Procurement Manager, FirstGroup

Satisfying customers

Thanks to our tough negotiation stance – and active implementation of the company’s more rigorous travel policy – FirstGroup’s hotel compliance rate has risen from 73% to 92%. As a result, the average price that FirstGroup is now paying for accommodation in London is 7% lower than they were paying last year. This is especially
satisfying given that the market rates have increased substantially in this time. And that’s a definite win/win for everyone concerned.