Flawed Accommodation Strategies - Main Image

Government efficiency report highlights flawed accommodation strategies

Written by on 21st October 2010
Category: Business Travel

After being brought in by the new government to review spending at Whitehall, Phillip Green – the billionaire owner of Topshop and BHS – has strongly criticised Whitehall’s control of its finances. Green has found that the government wastes billions every year; in particular, he says that the government throws away money by failing to negotiate the best contracts for phones, IT equipment and rent. If it were a business, he suggests, the government would fail.

Green’s suggestions will be familiar to the numerous major corporations who have had to tighten expenses over recent years. As his report shows, companies particularly struggle to monitor business travel expenses; however, for many corporations national and international travel is vital to keep their business going.

One of the clearest problems highlighted by Green’s report was that complex payment systems – within the businesses themselves and the service providers they work with – can lead to excess waste. For busy companies organising corporate accommodation for their employees, it’s easy to miss hidden extra charges: many businesses, for example, will process their nightly costs in one department and all extra costs in another.

Budget hotels following the airline model of unbundled rates have become increasingly popular thanks to the economic downturn and other hotels are often forced to follow suite in order to remain competitive. This means that they will offer a cheap basic rate, but services that would normally be inclusive are added on, such as breakfast, laundry, or a wake-up call.

Budget hotels are therefore often not as cost-effective as they seem. Hotels offering unbundled rates are a good option for guests staying just a few days, but most business travellers will stay for long enough to require broadband, laundry and other extra services, meaning costs soon add up.

There are other options, however. While budget hotels are unbundling costs, serviced apartments are offering more transparent pricing structures. In fact, the majority of serviced apartment rates include the two most common additional services: laundry and broadband.

Furthermore, serviced apartments often provide their own washing machines or communal laundry rooms, as well as their own kitchens, meaning that guests can enjoy a self-sufficiency not possible in most hotels. Because guests in serviced apartments can do their own cooking and laundry, fewer extra costs are incurred, making this type of temporary accommodation more cost-effective and convenient for the guests and the businesses they work for.