Travel buyers shouldn’t wait for travel to pick back up again before taking action on securing the best hotel rates, according to a TRIPBAM report.
TRIPBAM, which tracks and books corporate hotel rates, shared a number of recommendations with buyers this week as it released the findings of its latest quarterly report, which analysed trends amid Covid-19.
“It certainly seems a good time to renegotiate with brands and properties where they are seeing major declines in volume,” said Peter Grover, TRIPBAM Managing Director for Europe.
“It’s a buyer’s market and if you can deliver travellers to properties you should be able to secure rates that will continue to provide value in the future.
“It’s certainly not a time to sit on your hands. Our analysis found that corporate negotiated rates are often being beaten by retail rates. If your travellers are booking retail rates, because they’re cheaper, then they’re still paying more than they would if you secured some kind of corporate discount.
“With companies across every sector keeping a close eye on spend, it’s important to continue to generate savings wherever possible and, for many reasons, you want your travellers to comply with your programme so it needs to adapt to the current circumstances.”
Grover advised buyers to make sure they are consistently auditing hotel spend and negotiating rates where they are needed, preferably dynamic ones with LRA and no blackout dates, so they are not caught without a plan in place as travellers hit the road again.
He shared the advice after the company’s latest report, based on comparing January 2021 data with January 2020, found:
- Covid-19 is shifting travel patterns away from city centres toward more suburban and rural properties
- Hilton is gaining market share among corporate travellers over Marriott. Hilton has gained 43% in corporate market share while Marriott’s has fallen by 22%
- The average star rating has decreased across all bookings by 0.4 stars compared to the same period last year
- The leading business travel markets including London, New York and San Francisco have seen the greatest drop-off in volume but have managed to retain pricing power more than expected
- The average length of stay has increased by one day to 3.6 days and the average number of days booked in advance has increased from nine to 14 days.
Grover said many of these trends are explained by the fact that the people who are currently travelling and staying in hotels at the moment are likely to be frontline or essential workers, not senior-level executives.
TRIPBAM believes the shifts will not be permanent and expects guest volumes at upper scale properties will bounce back once non-essential travel resumes.
Grover also told travel buyers: “It’s important to consider the longer-term view on your organisation’s travelling population. You still want to have a hotel programme that will make sense for when travel does return — don’t discard agreements with city centre hotels if you expect they will be used in the latter half of 2021.
“Instead, the most important thing is to build flexibility into your hotel programme and to continue to monitor how stay patterns and rates may be shifting as this situation evolves.”