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Scandic Hotels Finland & Haaga-Helia University of Applied Sciences Research Project 2015

TOBBA 14

Date: 1.12.2015

Supervisors: Leena Aitto-oja & Jarmo Ritalahti


Project manager: Felipe Sader
Authors:

Wilma Karjalainen
Emilia Keski-Heikkil
Ilona Laine
Kimberly Lindstrm
Milka Mannila
Jasmine Menp
Dariana Oleinik
Melanie Oun
Pieta Salonen
Minta Summanen
Olegs Suarovs
Sofia Vanhatalo
Anna Vlachou
Carl deen

Special thanks to the commissioner for giving us such an exciting and interesting challenge. The
content of the project helped us immensely in understanding the corporate travel market.

Table of contents
1 Methodology .............................................................................................. 1
2 Sales ........................................................................................................... 2
3 Customer Service...................................................................................... 10
4 Market trends .......................................................................................... 14
5 Conclusions and observations .................................................................. 20

1 Methodology
1.1

Task distribution

Fifteen Students took part in the study. The tasks were distributed amongst three teams:
Sales Team - Communication and sales channels, how communication impacts sales, Sales based
on customers year clock, TMCs role in sales
Market Team - Market trends, content marketing, Scandic and Hilton image
Customer Service - Personal Customer Service, customer expectations, automated corporate
agreements, message from corporate customers, customer experience analysis.

1.2

Semi-structured Interview

This method allowed us to get a deeper understanding of the key issues at hand.
This method is especially valid when the research issues are not known, issues, attitudes and motivations need exploration, processes need describing in detail, contamination from other peoples views is to be avoided, complex explanation and understanding is required and an expert or
experienced individuals opinion is needed

1.3

Additional research methods

Theoretical support
We have structured our course based on the focus areas provided by Scandic in order to understand these issues fully and apply said knowledge to our research. We have built up a relevant
bibliography to better comprehend the areas of study. During the semester, we visited the headquarters of Amadeus, SMT and the Helsinki Airport to gain a better understanding of some of the
stakeholders in the industry.
Training and testing
We designed workshops to simulate the hotel sales process and customer service. Training for the
interviews took place during two week were we simultaneously tested the interview for length,
structure, flow and the quality of the questions.

2 Sales
2.1

How many employees does your company have in Finland?

This data collected from this question allowed us to compare the business habits of bigger companies and to smaller companies. As we can see from Figure 1, 48% of the companies we interviewed had 51-500 employees, whilst 16% had 5-50 employees and 36% had more than 500 employees.

Size of companies by number of employees


16%
36%

48%

1-50 employees

51-500 employees

501+ employees

Figure 1

2.2

How many times a year on average do you have organized meetings?

The answers varied depending on the size of the company. The lowest amount of organized meetings per year was two, whilst the highest was 150. The average amount was 10. Medium sized
companies have more meetings that require external facilities than larger companies. We believe
this is due to the lack of infrastructure of several medium sized companies that does not allow
them to host large meetings.

Number of employees

Numbers of organized meetings annually


501+
51-500
1-50
0

10

15

20

25

Number of meeting per yer


1-50

51-500

Figure 2

501+

30

35

40

2.3

How many times a year on average do you have organized events?

For the companies interviewed, the minimum amount of events per year was one, and the highest amount was 80. The average amount of organized events per year was five. In Figure 3 shows
clearly that larger companies host more events.

Number of employees

Number of organized events per year


501+

51-500

1-50

10

15

20

25

30

35

40

Number of events per year


1-50

51-500

501+

Figure 3

2.4

What is the average size of a meeting that requires external services? What is the average
size of an event that requires external services?

We determine that size is not necessarily a factor that affects the decision to use external facilities. We learned that the size range for meetings and events, which require external services, is
from five to 180 and from 20 to 300 for events. Due to some of the interviewed companies location and capabilities, it becomes a necessity whereas for other it is a luxury. We determined that
companies with offices in Southern Finland/Capital area make more use of their own facilities.

2.5

What is your companys yearly budget for events/meetings?

Answers varied from 1,000 to 390,000. Many respondents found it difficult to estimate their
budget for meetings and events. In many cases, budgeting for events is done throughout the organization of particular events and the company does not set aside or plan a yearly budget for
events and meetings. Some companies explained that each department within the company organized their own budgets for meetings. Companies that had specific annual events and a more centralized budgeting system were able to provide figures with confidence.

Its more about the target of the meeting and the length that determines its importance. Size is
not a factor.

2.6

Year clock on meetings and events

The most common time of the year to have meetings and events is fall with 54.2% of responses.
Spring with 37.5% responses was second, and winter with only 8.3% response. The open questions allowed us to determine that spring is the most active season for major events whilst fall is
the most active time of the year for business meetings and negotiations.

What time of year are you most active with


meetings and events?
Spring

Winter

Fall

13

Summer

0
0

10

12

14

Figure 4

2.7

What is your companys yearly budget for business trips?

Larger companies do not keep track of their business trip budget for Finland where medium sized
companies do. The average budget for medium-sized companies is 58,000. Most of the large
companies leave tracking of their business trip budget to their TMC's. In most cases, the TMC creates a general report that does not differentiate between local and international travel. 2

2.8

How many employees take part in business trips within Finland per year?

Of the total responses, 33% said 21-75 employees take part in business trips per year, including
overnight stays in hotels. Exactly 29% of the respondents said 5-20 employees and 38% more than
75 employees. There is no clear distinction between large and small companies in this respect. It
depends on the nature of the company and their need to travel.

How many employees take part in business trips within


Finland per year?
38% 29%
33%

5-20 employees

21-75 employees

76+ employees

Figure 5

Glaston Oyj was able to provide a specific amount for their local travel at 100,000 per year as
they have a limited amount of employees that travel within Finland. Their international budget
was in the millions.
2

2.9

Do you use a TMC to organize events/meetings/business trips?

TMC agreements
25
20
15
10
5

0
No

Meetings

Events

Business Trips

Figure 6
Exactly 20% of respondents do not use a TMC while 80% of respondents use a TMC to arrange
business trips. In addition, 40% uses a TMC to organize meetings and 36% organize events
through their TMC.

2.10 Most used TMCs


Five of the companies interviewed make their own arrangements by booking the
flights/accomodation directly from the service provider or through an online intermediary. The
most used Travel Management Companies were CWT with 5 respondents, SMT with 4
respondents, Via Egencia and HRG with 3 responses each. Kaleva Travel and BCD had 2 responses
each. None of the respondents used Ticketbiz.

TMC's in use
6
5
4
3
2
1
0

Figure 7

2.11 Current Agreement with the TMC


This question allowed us to understand the type of agreements negotiated between both parties
and what features are most used. More than 70% have agreements based on total travel Itinerary
service. Noticeably, 29% referred to the use of the TMCs online booking tool. A significant 12%
mentioned the security services and monitoring tools. Only 17% used Meetings/events services.3
Interestingly 5.8% emphasized the importance of reporting, group vouchers and 24h phone service.

TMC agreement features


Group Vouchers
24h phone service
Monitoring
Reporting
Meetings/events planning
Security services
Online booking tool
Travel itinerary
0

10

12

14

Figure 8

2.12 What do you look for in a TMC?


Figure 9 shows that the main criteria in a TMC are rates and service followed by security, processing time and availability.4

Main criteria for chosing TMC


16
14
12

10
8
6
4
2
0
Rates

Service
Rates
Service

Security
Processing time
Security
Processing time
Availability

Availability

Figure 9

It is worth mentioning that during a study visit to the SMT offices we learned that, despite event
services being only 10% of the total sales numbers it pulled in almost 50% of their total revenue.
4 During some interviews, the participants would express the importance of security when travelling abroad. They did not think it was of such importance in Finland.
3

2.13 How satisfied are companies with their current TMC?


We used this as a follow up for the last question in order to have a more detailed view of the market. The results demonstrated that almost 80% of respondents were satisfied with their TMC.
Only a small percentage wanted to expand into using more events related services. A small
amount were dissatisfied and considering changing to a new TMC. Many companies feel it is necessary to try different TMCs after the initial contract expires in order to get the most competitive
rates.

Satisfaction with current TMC


Very satisfied, want to expand

Satisfied, will continue using

Dissatisfied, want a better offer

Very dissatisfied, actively looking for new


arrangements
0

10

12

14

16

Satisfaction with current TMC


Figure 10

2.14 How did the companies think the following TMC's were performing in the Finnish market?
Carlson Wagonlit and SMT are the most used TMCs amongst the interviewed companies. Despite
more companies using CWT than SMT we can see that in the participants professional opinion
SMT is gaining market share. SMTs recent expansion has been perceived as move that is gaining
the company market share by professionals in the industry.

Market Share Analysis


14
12
10
8
6
4
2
0
SMT

Carlson
Wagonlit

Gaining marketshare

Ticketbiz

BCD

Maintaining marketshare

HRG

FCM

Losing marketshare

Figure 11

2.15 Has the development of virtual meetings affected the number of face-to-face meetings?
Companies have changed their meeting behaviour to be more efficient. 5 Only two of the interviewees said they have not changed their communication system as a consequence of virtual
meetings.
Have virtual meetings affected the
number of face-to-face meetings?

23

Yes

No

Figure 12

2.16 What communication tools do you use to buy travel and event services?
Every company that we interviewed has its own tools to buy travel and event services. Automated
portals and emails represent the most used tools. Most participants still rely on the telephone to
reach their account managers at their TMC. SMTs mobile app was described as effective by many
of the participants.

Most common communication sales tools


4 1
15
13

9
15

Automated Portals

Online Web Services

Email

Phone

Face to Face

Others

Figure 13

Quoted from an interview: Yes, this happened a long time ago. We started using virtual meetings
10 years ago and there was a drop in face-2-face meetings. We use virtual meetings every single
day.
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2.17 Describe the buying process in your company for hotel accommodation.
Every company that we interviewed had its own buying process that adjusts to their needs. Most
of the interviewees said that they use different tools during this process. These were the most
used communication tools in order of number of responses: Hotelzon, TMCs online booking tool,
Hansel Agreement, Online travel agency, Hotel Sites, Phone and emails.

2.18 Describe the buying process in your company for meetings and events.
Through this question, we wanted to discover the most followed procedures for booking meeting
and events. Most often by phone, email or a face-to-face appointment. After emailing, companies
tend to make a follow-up phone call to make sure both parties are on the same page. For larger
events of more than 200 people, most companies want to meet face-to-face to discuss what they
want from the venue and hear what the venue has to offer. Most companies contact multiple
venues to get the best offers and then determine which one is best suited for them.

3 Customer Service
3.1

When choosing a hotel for an overnight stay, what is your main priority?

Location is the main priority for 90% of the respondents, followed by price with 57%. Respondents
said they want to stay in a hotel that is near the purpose of their stay, whether it is an event or a
meeting. They also value cost efficiency, and want the hotel to offer business travelers the right
facilities such as free Wi-Fi with a good connection and workspace. Companies prefer to use hotels with which they have agreements. Brand recognition was important according to the respondents, and they value hotels that pay attention to environmental policies and come across as
safe.

Figure 14

3.2

When choosing venue for meetings and events, what is your main priority?

Location and price are the main factors that influence the decision making of a company, followed
by facilities, modern equipment and technology. Entertainment was also mention frequently.
Many of the respondents stressed the importance of catering when organizing events and meetings, and they wanted the location to be easily accessible. They preferred hotels with free parking
and Wi-Fi. Good seating and personalized service were amongst the other criteria mentioned.

Figure 15

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3.3

Have you used Scandic services in the past? Which services?

Figure 16 shows that 55% of respondents have stayed at Scandic overnight. Of all the respondents, 31% have used meeting and event venues at Scandic, and 4% have used other services such
as restaurants and bar service.

Figure 16

3.4

Customer service at Scandic

The overall result was positive. Six of the respondents thought the customer service was very
good, nine thought that it was good and four thought that it was average. Only one respondent
thought that the customer service at Scandic was below average.

Figure 17

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3.5

Does Scandic offer meeting facilities that meet your needs?

86% of the respondents thought Scandic offers appropriate facilities. Just 10% of them said the
facilities were not satisfactory, and 5% did not have any experience using Scandics meeting facilities. Participants specifically mentioned that the infrastructure at Scandic is modern and that
most venues have good locations. Some people that thought that the facilities are old-fashioned
and too traditional. Other participants suggested more locations near airports in Finland would
improve Scandics reach.

Figure 18

.
3.6

Personal or automated system?

Most respondents like to have some degree of personal service. It was stated that human contact
instils more trust. Some arguments in favor of automated processes were that it is easier and
timesaving.

Figure 19

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3.7

From your experience, what is the process of making an agreement with a hotel in Finland?

Making agreements with hotels in Finland was thought to be an easy and effective process. Respondents emphasized the importance agreements have when negotiating rates. Below are some
of the comments made during the interviews.
When its yearly agreements its face-to-face meetings. I like the breakfast sales pitch offering some hotels do, it is not only a good way to see the services offered but also to network.
It is easier when a sales person comes to the factory. Scandic does this. We usually arrange via a sales person through email.
Making agreements is difficult and challenging, the head of the company makes the deal.
Everything is set and applies to all departments. Once a system is established, the booking
is extremely simple and everything works well.
Negotiating is done with Hansel Agreement, very easy process. Hansel's governmental
agreement offers best rates in Finland.
It is quite easy to get good agreements and negotiate good prices.
All the major hotel chains approach us. There is lots of choice

3.8

Would you prefer automated system or personal approach when dealing with bookings
and the check-in/out process?

Nine respondents prefer automated service; eight prefer a more personal approach. Four respondents describe a balanced system of automated and personal service to be the ideal way of
interacting with hotels.

Figure 20

3.9

Should the hotel sales process be more automated?

Seventeen respondents thought there is no need for further automation of the process. Two respondents from larger companies wished the process was more automated in order to save time.
In the online survey, we also asked the companies about their main priority when booking venue
for meetings and events. Responses included such criteria as high quality, cost efficiency and an
accessible location. Furthermore, great service seemed to be highly appreciated as well as modern and well-equipped facilities.
When we asked how the respondents had experienced corporate self-booking tools, 36% described them as effective. Very effective represented 27% and 18% of the respondents had not
used the self-booking tools at all. Only 9% considered them ineffective due to possible technical
issues that may occur.

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4 Market trends
4.1

Market share of hotel chains in Finland

The respondents were asked to rate Finnish hotel chains according to their opinion of the position
of the hotels in the Finnish market. Most of the hotel chains were thought to be maintaining market share. Companies gaining market share included Radisson and Sokos. Overall Scandic was
seen as maintaining their market share. Cumulus and Holiday Inn were perceived as losing the
market share.

Market share analysis


20

15
10
5
0
Scandic

Sokos

Best
Western

Gaining marketshare

Hilton

Radisson Holiday Inn Cumulus

Maintaining marketshare

Crowne
Plaza

Rantasipi

Losing marketshare

Figure 21

4.2

Scandics performance

The overall opinion about Scandic was positive. The recent brand and hotel renovation was mentioned several times and its reasonable prices and offers. Some negative points mentioned were
lack of visibility, not enough competitiveness a lack of differentiation between Scandic Hotels and
Sokos Hotels.

4.3

Competitiveness

More than half of the respondents (55 %) thought the hotel market in Finland to be competitive
enough. As a follow up question, the respondents were asked to mention any other hotels that
they considered as competitors. The responses included some niche and boutique hotels such as
GLO Hotels, Gustavelund, Haven, Klaus K as well as some independent hotels in Lapland.

Is the market competitive?

45%

Yes

55%

No

Figure 22

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4.4

Scandics pricing

The respondents were asked to rate Scandics pricing in terms of overnight stays, meeting, and
event facilities. Only 8% of the respondents are unfamiliar with Scandics pricing for overnight
stays. Significantly, 28% of respondents were unfamiliar with Scandics pricing for meetings and
events.
Four percent of respondents rated Scandics pricing as inexpensive for both categories. In total,
56% thought Scandics rates for overnight stays are fairly priced. For meetings and events 52%
considered Scandics prices as fair. 32% of the respondents rated Scandics pricing for overnight
stays as expensive and 16% thought Scandic is expensive in terms of meetings and events.

Figure 23

4.5

Meeting and event performance

The respondents were asked to rate Scandic and several competitors (Best Western, Hilton, Radisson, Holiday Inn, Cumulus, Crowne Plaza, Rantasipi, Sokos) in terms of meetings and event services. Nine out of the total 25 respondents thought Scandics performance in this area is average.
Hilton and Radisson got the highest rating with 20 people ranking Hiltons meetings and event
services as exceptional or good. Radisson got 21 responses for performing exceptionally or well in
this area. Five respondents thought Cumulus is performing poorly when it comes to meetings and
events.

Figure 24

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The respondents were also asked to give reasons on why they think Scandic and its competitors
are performing as they are. Many out of 24 total respondents value customer service the most.
Other important factors for the respondents are location, facilities, price, services and design.

Figure 25

4.6

Can you mention any innovations from the corporate travel industry / events industry
you have recently seen?

The innovations mentioned by the respondents cover a wide range of topics starting from digitalization. Video conferences seem to be popular amongst the interviewed companies. They say it is
cost-efficient and less time consuming than face-to-face meetings as the need to travel is decreasing. They appreciated having access to internet (WIFI) everywhere and use more mobile apps
(bookings, boarding, check-in/check-out). The participants have also shown an inclination towards
environmentally friendly services. Respondents appreciate how the standard of the hotel rooms
has improved in the past few years (flat screen TV, security, green values). New competitors such
as Uber and Airbnb are entering the corporate travel market.

4.7

What kind of technological solutions for business travel do you expect/would you like to
see in the near future?

Respondents expect to see innovation in mobile apps with an emphasis on online check-in/checkout services. Many participants would also like to have more automated systems to make the
buying process more effective. Electronic sales and marketing will also evolve according to the interviewees. However, despite their interest in digitalization and technology, they still give a lot of
importance of the personal touch and to good customer service as experienced abroad.

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4.8

What effects have you felt from the trends in virtual meetings compared to face-to-face
meetings?

The following is a selection of the most relevant comments collected for this question.
Positive aspects of virtual meetings perceived:
Meetings are shorter
Skype is used for business
More efficient
Easier to keep track of agenda
Face-to-face meetings increase costs
Someone absent from the meeting can attend through Skype
Negative aspects of virtual meetings perceived by companies:
Technical issues may occur
Better chances of making brand memorable
Shaking someones hand and the physical connection plays an important role
It is harder to concentrate in virtual meetings
Virtual meetings aren't suitable for long meetings
No "small talk" nor networking with video calls.
Face-to-face meetings are more open and friendly.
Companies are going back to face-to-face
No innovation for 10 years in virtual meeting sector
Virtual meetings are not used in all companies
People still need training in virtual meetings.

4.9

Marketing received

The responses show that e-mails and e-mail newsletters are the most common way to receive
marketing from the corporate hotel industry followed by invitations for meetings and events.
Other responses that were mentioned include social media and fairs.

Figure 26

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4.10 Marketing preferences


The answers show that e-mail is significantly the most desired and convenient marketing method
followed by face-to-face meetings. Responses include also travel fairs, breakfast meetings, oldfashioned letters and social media. Responses are similar to the responses in the previous question of how they are in fact receiving marketing from the hotel industry.

Figure 27

4.11 Scandics marketing performance


The responses include answers from respondents that do not remember seeing much marketing.
Many respondents thought Scandic does not conduct enough marketing compared to other
brands.
I like Scandic's approach. It is personal and clear. I do not receive too many e-mails but we
meet face-to-face occasionally
At least they are not too aggressive. Scandic could be more active. Sokos hotels do 2-3 times
more marketing than Scandic hotels.
There is enough marketing. Maybe too much. Scandic has a very strong brand
I think it is ok. I haven't missed any information about their offers.
There is not enough marketing, Scandic has been very quiet.
I mix up Scandic and Sokos. No idea who does what. At least Sokos works more with bloggers
I dont remember what Scandic has done
I don't remember seeing any marketing from Scandic.
Too many offers via e-mail only, which maybe won't be noticed.
I don't remember seeing any marketing from Scandic.
I havent seen that much. Not that good, not since a year. Just irrelevant info.

18

I even had the Scandic club card. They sent direct marketing, which was not very bad. If you
think, you are going to travel and you get a good offer, such as a double room for 80 , then
you might open the email.
Really good
I don't get any marketing from them. I found out in spring I have an agreement. I have been
with the company for 3 years and they have not approached me with any offers.
I like it very much. They have a very good sales person, who helps me when needed. He is not
too pushy.
Not very exposed, not irritating, I dont know very much what is happening, brand is a bit old,
it hasn't reached me.
I am used to it. I don't pay attention to it
Appropriate, plain business text. Not funny or relaxed.
Not very good. Scandic could be more active. I do not remember seeing lots of marketing.
Comparing to Sokos, they send much more marketing and information about their new hotel
ideas than Scandic
Lots of high-class breakfast and lunch events organized to introduce Scandic to potential clients in Turku.
It is similar to its competitors. It is more hip with a good use of celebrities.
There is not enough marketing, I can't remember the last time seeing anything from Scandic.
It could be more aggressive.

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5 Conclusions and observations


The in-depth interviewing allowed the team to gain an insight into the role of each participant.
This method allowed the interview to flow like a casual conversation. We spoke with travel managers and assistants to CEOs. Each interviewee was experienced in corporate travel and fully understood the questions. The interviews were recorded to guarantee transparent results.
The following is a summary of the most interesting findings.
Medium size companies arrange organized meetings more than large companies due to the lack
of infrastructure and the need to expand in their respective markets. Larger companies answered
that they did not have an allocated budget for meetings and events whilst smaller companies did.
Regarding yearly spending patterns, more meetings are arranged during the autumn, whilst
events are mainly held during the spring. Winter and summer are quite idle in terms of organized
meetings and events.
CWT was the most used TMC, but companies perceived SMT as the leader of the market. Respondents praised SMTs mobile booking tool. The merger between Area Travel Agency and Finland Travel Bureau has consolidated itself in the opinion of the respondents, making SMT the
market leader in their eyes.
Automated portals and emails were the most popular communication tools for buying travel and
event services. Regular phone calls were preferred for closing deals. Face-to-face communication
was deemed important for the first contact with a sales person. A balance of both automated service and personal approach is what most professionals are looking for. Automated systems have
become a necessity but it is important to maintain personal communication.
Radisson was thought to be the hotel that is gaining the most market share. Boutique hotels and
AirBnB are gaining popularity with business travellers. The majority of the interviewees agreed
with Scandics marketing approach although some felt it was not aggressive enough. This emphasizes the need for content marketing. Creating a customer profile that allows direct marketing
that caters to their needs and possible wants.
This was a preliminary study of the corporate travel market in Finland. For a better understanding
of trends, communications and sales processes, we recommend renewing this study the next fiscal quarter to see the development of the industry through a wider period.

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