The average corporate negotiated hotel rate will increase by
between 3.25 percent and 4 percent in 2017, according to analysis that will be
released today by Bjorn Hanson, a clinical professor with the NYU School of
Professional Studies Jonathan M. Tisch Center for Hospitality and Tourism. This
RFP season also will mark a significant transfer
of power from hoteliers to buyers.
In 2015, forecasts for continued high occupancy in 2016
fueled corporate rate increases that ranged between 5.75 percent and 7 percent,
according to Hanson. Heading into the current RFP season, "many corporate
travel managers and convention planners believe they have been overpaying in
2016" and will push harder to keep rates in check in 2017, Hanson
said.
Further fueling a power shift in the 2017 hotel RFP season,
Hanson said, are hotel brands' new loyalty
member discount rates introduced earlier this year, as well as the three
mega travel management companies' endorsements
for Airbnb's business platform. "Some corporate travel managers and
convention planners have been surprised at the published member rates and nonrefundable
rates published on brand websites because they can be lower than the corporate,
contract or convention rates that were expected to be lower than rates available
to the public," Hanson said in his analysis.
To combat average daily rate increases, according to Hanson,
corporate programs are shifting inventory away from luxury and upper-upscale
properties to upscale and select-service
properties, embracing Airbnb when appropriate, allowing travelers to book
outside the preferred portfolio in order to capture lower rates and improve
traveler satisfaction and, conversely, both cracking down on compliance and
auditing expense reports to enforce travel policies.
Hanson's analysis and estimates are based on interviews
with hotel industry executives and corporate travel executives and analysis of
industry financial data, press releases and hotel and brand websites.