Supporting DHL with a preferred accommodation programme

Deutsche Post DHL Group, a global leader in package delivery and supply chain management, entrusted us with managing their business travel and accommodation needs for over two decades.

Throughout this long-standing relationship, we have continually implemented projects to enhance process efficiencies and deliver savings. One such initiative was the renegotiation of their preferred accommodation programme.

DP DHL’s UK programme is renegotiated annually, and we have consistently ensured they receive a top-tier hotel programme. Considering the return to travel and meetings post-pandemic, we collaborated with DP DHL’s Procurement Manager to explore options for the 2022/2023 programme. The options were to negotiate a new programme or extend the existing one for the third consecutive year, maintaining current rates. Like many of our customers, DP DHL has adapted its profile and embraced new working methods post-pandemic.

Our strategy focused on early engagement with both the customer and our hotel suppliers to articulate and agree on our plan of action. The challenge was low business volumes over the previous two years due to the pandemic and resulting lockdowns, combined with significant price increases driven by pandemic aftershocks, high occupancy levels, and inflationary pressures. We decided to negotiate a hybrid programme, asking hotels to either roll over rates or submit new rates.

Solution

With our approach agreed upon, Clarity’s Account Manager met with DP DHL’s Indirect Procurement Manager to discuss the strategy for negotiating their preferred accommodation programme. We engaged with our hotel partners early to understand their rate strategies.

This early engagement allowed us to have productive and meaningful conversations with DP DHL’s preferred suppliers, who also saw the benefits of a collaborative relationship.

These initial discussions led to a mutual understanding with key providers such as Jurys and Hilton hotels, who offered minimal rate increases to cover operational costs only.

In consultation with product category specialists who provide expertise and insights across all travel-related spend areas, Clarity’s Account Manager oversaw a four-step process to deliver an enhanced, optimised accommodation programme that fully met DP DHL’s compliance and cost reduction objectives. This process included:

1. Diagnostic benchmarking of the existing programme and supplier deals
2. Strategic sourcing and renegotiation of the preferred supplier programme
3. Category management and ongoing optimisation
4. Behavioral change through educational materials and online messaging to drive programme compliance

Recognising changes in DP DHL’s profile and traveller requirements, we supplemented traditional hotels with aparthotels such as Staycity, Staybridge, and Adagio, offering DP DHL travellers an alternative option of staying in an apartment rather than a hotel.

After three rounds of negotiation, we presented the proposed programme to DP DHL’s Procurement Manager for approval. The result was a 26% savings against DP DHL’s 2022/2023 preferred programme.

Results

The outcome was exceptional. We mitigated cost increases for many groups while maintaining existing rates for most groups and independent hotels, including Accor and IHG branded hotels. The new aparthotels added to the programme were also competitively priced for high-end brands.

Cost avoidance savings presented to DP DHL’s Procurement Manager and the UK team included:

• Savings against the market average: Overall programme negotiation resulted in a 4.6% increase, significantly lower than the market forecast of 20%. PwC had forecasted a 32% increase for London and an 8.9% increase for the provinces.
• Preferred rates versus non-preferred rates: In preferred locations, the average rate for the programme was £88 compared to £99 for non-preferred rates, saving the customer 9% per room per night.

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