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Article Excerpt
Health Net, a national managed care company, has used all of the latest techniques to surgically remove nearly one-fifth of its hotel spending. The midmarket firm took advantage of trading down, rate compression, property consolidation and the controversial practice of reverse online auctions, employing the open bid format for 40 percent of its top destinations.
Health Net's 19 percent savings in negotiated rates from 2002 to 2003 significantly was higher than the average 2.5 percent savings that 123 travel managers reported in a UBS Warburg survey that was released last month.
With travel managers under magnified pressure to show cost savings, trading down can be a particularly risky proposition, if travelers, accustomed to full-service amenities, resist the more limited services available at midprice hotels. Yet, as in Health Net's case, mandates built into the corporate travel policy...
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