Inside Track: Marriott's 2008 Corporate Rates Could Rise 8%

With companywide negotiations completed and property-level negotiations just beginning, Marriott International last week said its corporate negotiated rates would increase in the 6 percent to 8 percent range in 2008. Marriott's expectations, announced by CFO Arne Sorenson in the company's third-quarter earnings conference call to investors, is slightly above the 5.7 percent increase PricewaterhouseCoopers predicted in overall U.S. corporate rates last month. Sorenson also said Marriott is in line to open 30,000 rooms both in 2007 and in 2008, while the hotel company will remove 11,000 rooms this year and 5,000 in 2008.

Runzheimer: 2008 Business Travel Costs To Grow 4.5%
Runzheimer International last week predicted overall 2008 business travel costs to increase 4.5 percent. The firm looked at the four major expenses that comprise travel budgets—air, car, hotel and food—and weighted them for its annual forecast. Though Runzheimer contends domestic legacy carriers have lost much of their pricing power, air expenses are forecast to grow 5 percent "only because legacy airline costs continue to rise and cannot be cut any further." Hotel costs also are expected to increase 5 percent. "Professional travel management experts are already seeing a revolt against what seemed like an eternally predictable standard 10 percent annual rate increase in lodging prices," Runzheimer notes. "Less costly alternatives are now available and corporate controllers seek to reduce this category's cost." Runzheimer said inflation would drive meal costs up 5 percent, as rental car costs are expected to grow 3 percent.

JetBlue To Go Cashless For Inflight Purchases
JetBlue Airways on Nov. 1 expects to begin accepting credit and debit cards for inflight purchases in lieu of cash, using onboard card readers provided by its LiveTV subsidiary. American Airlines last month also tested card payment for onboard purchases on flights from San Francisco. AA vice president of onboard service Lauri Curtis said, "We are seeking feedback from passengers and from our flight attendants to determine if this consumer behavior also works with the purchase of onboard items." Other carriers, including Delta, Midwest and Hawaiian Airlines, have credit card readers for inflight purchases on at least some flights.

CWT Acquires Pirelli's In-House Travel Agency
Carlson Wagonlit Travel last week announced the acquisition of Italian corporation Pirelli's in-house travel agency Polo Viaggi for an undisclosed amount. CWT effectively takes over the travel management services for Pirelli and Polo Viaggi's other business travel accounts. The agency also operates incentive and leisure divisions. CWT would not disclose Polo Viaggi's volume. With the integration of Polo Viaggi, the total sales volume of its wholly owned CWT Italia subsidiary is expected to exceed e600 million in 2008.

Hilton To Boost Midprice Presence In Russia
Hilton Hotels Corp. is bringing an additional 25 hotels to Russia and Central Europe in the coming year through a development deal announced last month with United Kingdom-based Belgravia Asset Management Limited. Under the terms of the deal, Hilton will open and manage 25 midprice hotels, comprising 3,000 rooms, in the region under the Hampton by Hilton and Hilton Garden Inn brands, including a Hampton by Hilton in St. Petersburg set to open in the second quarter of next year. The agreement follows a deal announced in June with London & Regional Properties Limited, in which Hilton will bring 25 hotels, both midprice and upscale, to the region. Hilton plans to operate 70 hotels in Russia in 10 years. Hilton particularly is focusing on expanding its Hilton Garden Inn brand into international markets, including Russia, India, Italy and Germany, which currently have a minimal presence of brands recognizable to U.S. travelers, said Jim Cone, vice president of marketing for Hilton Garden Inn.