American Express unexpectedly has eliminated its fixed hotel consortia rate program for 2004, according to hoteliers this week attending the PhoCusWright Executive Conference in Orlando.
Canada-based VIP International Corp., which provides reservations services to 4,600 hotels, is "still stinging" from the "abrupt dissolution" of American Express' traditional consortia program, vice president of strategic development Rita Emmer told Pamela Arway, American Express executive vice president and general manager in North America, during the conference.
Arway said, "We believed the previous model we had for dealing with hoteliers was not the right one for us, and so we've moved on. A number of hoteliers have chosen to participate and others sadly have not." She did not offer specifics and a company spokesperson in New York declined to comment.
American Express was rumored in recent months to have demanded lower, more competitive rates than competing consortia programs and met stiff hotel resistance. Consortia rates are used widely by travel managers who do not have negotiated rates of their own in a particular destination.
With the hotel industry poised to strengthen in 2004, there's been more interest on the part of buyers in keeping a lid on consortia rates. Marriott International this month announced it was moving away from offering the fixed consortia rates it typically offered in favor of a floating model, where rates vary market by market on a daily basis
(BTN, Nov. 10).
Arway applauded the recent Marriott announcement. She previously noted that, "Travel managers just want the price and they want to be assured the price they're getting, booking through my channel, is as good as anything they get anywhere else. So it's important we and our competitors negotiate the rates."