Business Travel March-April-2021

ACCOMMODATION
Rise and
SHINE
Four experts share their advice on how to respond
to trends in the accommodation sector
Nina Marcello
American Express GBT
Principal, Global Hotel
Practice Line Lead
Hotels have been under immense pressure,
operating at vastly reduced capacity with the
lowest occupancy rates on record. They have
had to meet additional costs around cleaning
protocols, particularly when rooms must be
left vacant between guests. Revenue per
available room has dropped, so hotels have
had to find other ways to maintain revenues,
such as offering companies meeting space
as an extension of their office space.
Travel buyers might see this as the ideal
moment to overhaul their sourcing strategy,
but this only makes sense if they have
sufficient volume in their programme.
Many hotels just don’t have the staff to
work on RFPs and many won’t take
corporations seriously if they plan to book
only 40 nights per month.
To make sure they can get the rooms they
need, at the right rates, buyers need to take
a longer-term view. Sourcing in today’s fluid
environment is a continuous process: don’t
just roll over your rates or fix and forget.
Keep an eye open as volumes return,
maintain relationships and talk regularly with
top partners so they understand what kind
of support you need when travel starts
moving again. And, as part of their focus on
rates management, buyers need to make
sure they get any available percentage
discounts off the best available rate when
this is lower than their negotiated rates and
take advantage of resources like travel
management company (TMC) rates and
re-shopping tools.
Peter Grover
TRIPBAM Managing Director
for Europe
It’s no great shock that Covid-
19 has had a major impact on the corporate
hotel market. Booking volumes are down
86% year over year globally, with European
volumes down 95%. This greater decline in
Europe can be attributed to firmer national
lockdowns compared to the U.S. and weaker
domestic travel.
At TRIPBAM we’ve seen a number of trends
emerge, not only in rate but also in stay
patterns and demand by segment and
brand. While European volumes may be
down compared to the rest of the world,
we’re not seeing the same rate volatility
here, with more hotels retaining pricing
power compared to their North American or
Asia Pacific counterparts.
Travellers who are booking overnight stays
are doing so outside of city centres and at
lower-scale hotels.
Stays at five-star properties are down 91%,
while stays at two-star properties are down
only 56%. This is being driven largely by the
types of workers who are still travelling. This
change in the travelling population is also
shifting market share among the chains, with
independent properties gaining the greatest
share of corporate travel bookings ahead of
Marriott, Hilton and Accor.
How can you as a buyer respond to these
changes? First of all, look at your current
travel volumes. If you still have people on
the road, you’ll want to make sure you
negotiate or renegotiate discounts at
properties they’re currently using. Retail rate
bookings are up 55%, which indicates
corporate negotiated rates are either out-ofstep
with the market or they don’t exist at
the properties being booked.
22 THEBUSINESSTRAVELMAG.com