CORPORATE LODGING CONSULTANTS CASE STUDY In the aftermath of the devastation of Hurricane Katrina in August 2005, the states of Louisiana, Mississippi and Alabama were affected well beyond any previous disaster in the history of the United States. The responding authorities the American Red Cross and the Federal Emergency Management Agency found the demands for services they provide, including safe shelter for evacuees, far exceeded their resources for any system already in place. Three weeks later, the catastrophe was compounded by the landfall of Hurricane Rita in Texas and Louisiana. Marty Robey/American Red Cross American Red Cross and FEMA lodging programs: Housed more than 700,000 evacuees in every state Used more than 11,000 hotels and 290,000 separate hotel rooms Hotel billings through CLC totaled more than $350 million While ARC specializes in assisting people during national disasters of all types, the organization had never experienced a need for evacuee housing of this magnitude as hundreds of thousands of people caught in the storms had no place to turn. This situation was so different we had to redefine and expand the meaning of shelter, said Michael Brackney, manager of client service program development for ARC in Washington, D.C. With a disaster of this magnitude, you have to think on a different scale, and understand all of the problems and issues. You must have a place to put people. Many evacuees had fled to hotels before Katrina hit. In the days following they began leaving hotels for the shelters, which were already overflowing. To make matters worse, the evacuation of New Orleans was not yet complete. ARC was approached by FEMA and state government officials looking for a way to temporarily keep evacuees in hotels. Brackney knew a large-scale, short-term lodging solution had to be found and quickly. He looked to a company with which ARC had already built a dynamic relationship - Corporate Lodging Consultants Inc. Based in Wichita, Kansas, CLC provides customized lodging programs to more than 250 companies throughout North America.
C O R P O R A T E L O D G I N G C O N S U L T A N T S C A S E S T U D Y We were pleased that we were able to respond to ARC s needs less than two days after the call came in. Everything that we ve spent the last 25 years building was already in place. Our customdesigned software system. Our relationships with the hotels. Knowledgeable staff. The formula was just right to make this program work quickly and effectively. Kyle Rogg Senior Vice President of Business Development Corporate Lodging Consultants Inc. CLC was experienced in disaster response: The company had previously arranged lodging and processed payment for ARC staff and volunteers working hurricanes Georges in Puerto Rico in 1998, Floyd in 1999 and the four Florida hurricanes in 2004; the September 11, 2001 terrorist attacks in New York, Washington and Pennsylvania; and numerous fires, floods, tornados and other disasters. Even prior to Katrina, CLC had demonstrated a solid working relationship and proven capacity to meet our needs effectively, Brackney said. After the landfall of Hurricane Katrina on Monday, August 28, CLC was already hard at work securing lodging for ARC staff and volunteers. Three days later, just before Labor Day weekend, Brackney approached CLC to inquire whether the company could expand its scope of services to include lodging for hurricane evacuees. It was difficult to project the magnitude of the need. We had no idea how high the numbers were. We just knew there were more people than there were places to sleep, Brackney said. ARC needed a partner that would be responsive to its immediate needs. A solution-oriented company with the ability to mobilize immediately. The Red Cross needed Corporate Lodging Consultants. Experience and expertise Just 44 hours from the time ARC made its request with continual input and feedback from ARC CLC presented a customized, systems-based program to provide lodging for evacuees. FEMA was considering its options for temporary housing, and the agency looked at renting entire properties or relocating evacuees to large camps on former military bases, Brackney said. They chose to adopt the Special Transient Accommodations program, and it was launched immediately. CLC President and CEO George E. Hansen III said the company s extensive experience providing lodging services to companies across the United States, as well as the Red Cross, allowed it to take the strongest components of its programs and provide a comprehensive yet clear solution to ARC s need. CLC s hotel hotline provided immediate assistance to hoteliers participating in the lodging programs. We had more questions than answers at the outset, Hansen said. But we knew we had the experience, the people, the systems and the will to respond. Our fellow Americans needed us and we answered the call.
CLC had several core strengths that allowed it to administer the program. Prior to the hurricane the company secured seven million hotel room nights for its corporate clientele annually, so it had already established relationships with a large number of hotels across the country. Much of the success of this program was based on trust, said Tim Downs, executive vice president of operations for CLC. Obviously this was a new and yetuntested program developed under less-than-optimum circumstances. But through many years of serving our clients, we had developed the trust of the hotel community and they were willing to get on board with this program. Likewise, Red Cross had a sincere trust in the abilities and credibility of CLC. CLC s billing processes were time-tested, too. Hotels could submit bills via the Internet or by fax, and CLC would make sure the right hotels were paid the right amount at the right time. Additionally, the company had demonstrated in working with Red Cross during past disasters that it could respond rapidly to a program s changing needs and circumstances. The Special Transient Accommodations program was met with immediate success. Within the first week, more than 108,000 evacuees had found rooms at thousands of hotels nationwide. The question of Where are my family and I going to sleep tonight? was answered, Brackney said. That brought some sense of relief to have a roof over their heads. At the peak of the program in early October, more than 250,000 evacuees were housed through CLC. And there were more record-breaking numbers. Throughout the four largest hurricanes of 2004, ARC provided assistance to about 73,000 families. This disaster was 16 times that size, Brackney said. Every two days, we were assisting the equivalent of the entire 2004 season. Without CLC, I m not sure we would have even tried this solution. Brackney said it was ARC s past experience with and confidence in CLC that convinced him to make the call. Corporate Lodging knew how much we value the safety and dignity of our staff and volunteers from having served us in the past, Brackney said. It was crucial to us that our clients in this case, the evacuees be treated with the same consideration. We felt assured that CLC would understand and embrace this need. Faster service, lower room rates Understanding the needs of the hotels participating in the program was crucial for its success, as well. For most of the 11,000 hotels participating in the program, it was important that a company with which they were already familiar administered the program. They also needed to be assured they would have the operational support they needed and would be paid in a timely manner. Jimmy Thomas is director of global sales at Inter- Continental Hotels Group, whose multiple brands include Holiday Inn, Holiday Inn Express and Crowne Plaza. CLC s effective and efficient communications to InterContinental s hotels were an important part of those hotels participating in the program, Thomas said. Through e-mails and CLC s web site, being able to get information from CLC from how to sign up for the program to how to get paid for guest stays was made very easy. There was also a streamlined, quick payment process, which made the hotels confident about servicing guests and getting paid for it, Thomas said. And, if we had questions, it was easy to get in touch with CLC staff nearly any time of day. The ARC Special Transient Accommodations program was unique in the disaster response industry, both in concept and in scale. It worked well, said Kyle Rogg, senior vice president of business development for CLC, because of the extensive resources his company already had in place. We were pleased that we were able to respond to ARC s needs less than two days after the call came in, Rogg said. Everything that we ve spent the last 25 years building was already in place. Our customdesigned software system. Our relationships with the hotels. Knowledgeable staff. The formula was just right to make this program work quickly and effectively.
The Special Transient Accommodations program assisted hotels and the American Red Cross in several key areas: Qualifying evacuees: Because evacuees had to be from an affected area to qualify for the program, hotels were asked to check a driver s license or other proof of residence, such as a utility bill, at check-in. A list of qualifying zip codes was posted on CLC s web site, taking the burden off of over-extended Red Cross staff and volunteers or government officials to verify evacuee eligibility. Downloading billing instructions and program information, and obtaining tax exemption information: Detailed information was at hoteliers fingertips on CLC s extensive web site. Communicating hotel room availability for additional evacuees: CLC routinely posted information on its web site regarding the areas in which the most hotel rooms were needed. Hotels could report availability back to CLC online. Obtaining a secure American Red Cross hotel identification code: A pre-authorized registration code allowed participating hotels to securely log onto CLC s web site any time of day to view information about their account. Billing via the Internet for payment in 10 days or less: Utilizing software already in place for CLC s corporate clients, hotels participating in the program could bill online daily for guest stays. CLC s automated auditing program checked billings for accuracy and double billings. Billing via fax for hotels that didn t have the Internet: Recognizing that not all hotels use the Internet as a part of their operations, CLC accepted faxed billings to ensure those who wanted to participate in the program were able. Tracking billings end-to-end: Through its Oracle-based system, hotels could track the process of payment from the time CLC received an invoice until a check was cut. A streamlined process meant CLC averaged payment to the hotels in fewer than seven days. Through e-mails and CLC s web site, being able to get information from CLC from how to sign up for the program to how to get paid for guest stays was made very easy. There was also a streamlined, quick payment process, which made the hotels confident about servicing guests and getting paid for it. And, if we had questions, it was easy to get in touch with CLC staff nearly any time of day. Jimmy Thomas Director of Global Sales Inter-Continental Hotels Group Obtaining answers to questions via telephone, Internet and e-mail: To keep communications flowing, CLC maintained a daily hotel hotline and a 24/7 support center for ARC, sent e-mails and faxes with new information to the hotels and maintained Frequently Asked Questions on its web site. The elements of the lodging program, already a part of CLC s successful corporate lodging recipe, allowed the program to operate with little difficulty. We have a bias towards speed and an addiction to making customers happy, Rogg said.
CLC also had the ability to add new hotels to the program rapidly, meeting a crucial need in many areas of the country where hotel rooms were desperately needed. And CLC s negotiated room hotel rates individually established with hotels by CLC s pool of negotiators meant rates during the lodging program have averaged one-third lower than the average U.S. room rate. CLC knew its business. They really cared about what they were doing and it showed, Brackney said. Someone was always there to answer the call, even at 2 a.m. Brackney said his organization found an unexpected alliance with CLC through the Special Transient Accommodations program. During disasters, we are used to our staff and volunteers making sacrifices of long hours, seven days a week, Brackney said. We are not used to our partners making sacrifices. I know there were people at CLC who didn t see their families for days, and who worked holidays and weekends to ensure the program s success. The transition from ARC to FEMA Historically, the role of ARC has been to manage disasters during the crisis phase, providing immediate relief to those affected by an event. The ARC Special Transient Accommodations program was funded through FEMA, which had remained in the background at the onset of the program, but decided to assume direct oversight of the program beginning October 25, 2005. At that time, ARC s program transitioned to the FEMA Short-Term Lodging program. CLC, already on the government s Federal Supply Schedule, was issued a task order from FEMA to continue administering the lodging program. For the federal government to take on the program, during this nation s greatest natural disaster, speaks volumes for CLC s ability to deliver, Brackney said. To date, the ARC Special Transient Accommodations and FEMA Short-Term Lodging programs have housed more than 700,000 evacuees in every state, involving more than 11,000 hotels and 290,000 separate hotel rooms. Hotel billings through CLC have totaled more than $350 million. While the majority of evacuees have found more permanent housing options over the past several months, the Short-Term Lodging program remains in place as FEMA works to secure longer-term housing for the thousands of evacuees still living in hotels. CLC remains committed to providing the highest level of service to its client, FEMA, and to the hotel community. An intriguing outfit The ARC and FEMA lodging programs have been observed by media nationwide, ranging from the New York Times to the Washington Post to USA Today. Boston Globe editorial writer Thomas Oliphant unexpectedly called out CLC s performance in a September 22, 2005 column that said: I am intrigued by a small outfit out of Wichita, Corporate Lodging Consultants. In addition to its expertise in booking hotel rooms for clients, it has long worked to help house Red Cross first responders during disasters. But in the face of an unprecedented need over Labor Day, it rewrote its software and geared up to book evacuees, responding to the Red Cross inspired idea that hotels could qualify victims quicker than it could. The result, last I checked, was that some 70,000 families have been placed in rooms not just in the region but from Vermont to Hawaii as well, based simply on proof they come from a qualifying zip code. About Corporate Lodging Consultants Corporate Lodging Consultants Inc. provides customized lodging programs to more than 250 corporations throughout North America. Through its sophisticated transaction processing technology and the purchasing leverage of seven million rooms at 11,500 hotels, CLC delivers both unmatched savings and comprehensive solutions that include rate negotiation, electronic auditing, consolidated billing and flexible reporting services. If travel is a critical component of your business, CLC can reduce the cost of your lodging program, with less effort and increased traveler satisfaction. Corporate Lodging Consultants, Inc., Wichita, KS 1.800.835.4045 www.corplodging.com
Tim Leverett/American Red Cross Corporate Lodging Consultants Key Strengths: Experience developing custom lodging solutions Proprietary systems processing millions of transactions from thousands of hotels CLC knew its business. They really cared about what they were doing and it showed. Someone was always there to answer the call, even at 2 a.m. Michael Brackney Manager of Client Service Program Development American Red Cross in Washington, D.C. Rapid application development Respect within the hotel industry Seasoned negotiators able to rapidly add hotel capacity Integrated, 24 x 7 communications capability We had more questions than answers at the outset. But we knew we had the experience, the people, the systems and the will to respond. Our fellow Americans needed us and we answered the call. George E. Hansen III President and Chief Executive Officer Corporate Lodging Consultants Inc.