For almost a decade, corporate travel managers have been clamouring for a comprehensive breakout of their hotel spend, commonly known as the hotel folio. The hotel folio itemises the rate versus the amount spent on tax, amenities – such as mini-bar, movies, and parking – and any other extras on a particular bill. Now corporate travel managers have access to such technology. Within the last year, eFolio, the electronic version of the hotel folio, has become widely available from major hotel chains in North America.
Knowing what your company actually spent on the hotel rate, and having the charges itemised and pre-populated by the corporate card provider in the corporation’s expense reporting tool, has obvious benefits. The content information provides travel managers with leverage in their negotiations with hotel suppliers. The greater accuracy of the data, as opposed to information the traveller manually inputs, also enables companies to better monitor compliance to their travel policy. The traveller meanwhile saves valuable time by having the expense report pre-populated with the detailed content.
Clearly, in today’s competitive and cost-conscious environment, having comprehensive data is the key to managing a successful travel programme. eFolio provides the answer, filling in the information gap on the hotel spend that has long created difficulties for travel managers.
The logic of adopting eFolio is obvious. Actual utilisation, however, has been a mystery. To what extent has the marketplace been embracing this long-sought-for capability? To find out the degree of penetration, as well as the future prognosis of eFolio usage, ACTE, in partnership with MasterCard, conducted a survey on eFolio usage among North American buyers in August. The results are as follows:
12.5 percent of respondents currently receive hotel folio line item spending data from their card providers.
76.6 percent—more than three quarters of survey respondents—plan to obtain the content in the near future.
Almost half of respondents—47 percent rate the importance of getting electronic transmission of hotel folio data in their expense management system as “very critical.”
Respondents in the survey rated the various benefits of eFolio to the travel management programme, the traveller, and the company organisation. Under travel management, the results were as follows:
– 52 percent of respondents rated “expands hotel negotiations based on all spend, not just room” as very critical.
– 51 percent rated “enhances decision support through deeper levels of reporting and analysis” as critical.
More than a third noted the following benefits were either critical or very critical:
– “provides detailed metrics to track compliance and improve policies” (42 percent)
– “enhances value proposition to travelers along with price, location, services, etc.” (44 percent)
– “sustains/grows traveller adoption of travel tools” (42 percent)
– “streamlines pricing cycle via more accurate and detailed data” (39 percent)
Early adopters and those in beta testing validate the survey response of perceived benefits to managing hotel spend.
ON Semiconductor, based in Phoenix, is currently in a beta test with its corporate card provider. Strategic sourcing manager Colleen Guhin said she has already identified instances in which the hotel did not charge the traveller the negotiated rate. Previously, Guhin relied on the travel agency and the corporate card provider for the data. “I could not audit the hotels to see if we were getting the preferred rates or see the spend per night,” Guhin said. “Now I can better see what we need to do when negotiating. Also, it is a way to monitor policy compliance.”
Another travel manager summed up the benefits: “First, it validates what we are actually buying. Is it close or not to the corporate discount? Second, we will be able to sit down with the supplier at these hotels and see that we are paying this much for the restaurant and other amenities. If we spend $10m with a given chain and $2m of that is for high-speed internet access, we will want to negotiate that expense.”
Five years ago, the eFolio initiative got its first big boost from IBM, which became the first corporation to obtain the data. IBM began requiring its preferred properties to provide the efolio. At IBM, eFolio has “taken the cost out of the system for everybody,” Mark Williams, category consultant at ISC Procurement Services at IBM said. “It is easier for the card companies and saves on auditing costs. From an auditing perspective, it detects fraud and will kick out anything out of policy.”
The corporation is a stakeholder, also, in deriving benefit from the expansion of eFolio, especially related to auditing.
In terms of the value to the organisation, the survey results illustrate the following:
– 54 percent of the survey takers rated “further automates the internal auditing process” as critical.
– 46 percent noted “helps avoid travel expense reporting fraud” was critical.
– 40 percent said “moves the company to a more paperless environment” was critical.
James Haddow, chief global procurement officer at AT Kearney, Inc, based in Alexandria, Vancouver, said his company audits all expense reports. However, once eFolio is implemented—an initiative that is “high on the radar screen from a procurement and management and finance perspective”–he expected the automated feed of the line item detail from the card provider would “probably give us a savings in labour” because the company would switch to auditing a sampling of reports. This would “potentially reduce the number of auditors needed.”
One particularly valuable feature of eFolio was the elimination of paper receipts. As an electronic receipt, which is acceptable to the government, eFolio is an invaluable aid to auditors. The pre-populated report also represents a time savings for travellers and enables the company to monitor expense reporting to a degree that was not possible before
Regarding value to the traveller, the ACTE-MasterCard survey results were as follows:
Almost half of participants — 47 percent — said “increased productivity via faster expense report completion” was very critical.
43 percent indicated “reduced errors association with manual calculation and data entry” is very critical.
With an eye to future roll-out of eFolio on a global basis, Haddow predicts one big advantage of having expense reports from stays in hotels outside of North America pre-populated with the data on a nearly real-time basis: “The exchange rate issue goes away. Because it is an electronic receipt, the eFolio relieves the traveller of having to keep track of paper receipts.”
eFolio represents a turning point in the advancement of business travel management.
As more hotels sign on and corporations resolve privacy issues, eFolio can become an indispensable tool for successful management of the travel programme on a global basis.
Corporate travel managers will have complete transparency into where their dollars are being spent in the hotel portion of their programme. However, the expansion of eFolio beyond the fraction of US corporations currently using it will not occur unless corporate travel managers express the need to their hotel vendors and expense reporting systems vendors. Corporate travel managers are finally able to reap the benefits of eFolio, and the potential for expansion is virtually unlimited. Travel managers hold the keys as to whether this potential is realised, and the goal of universal availability of eFolio is achieved.
