After a turbulent
2025 in which business transient demand left some hoteliers wanting, corporate
travel buyers on the whole held negotiated 2026 hotel rate increases to low
single-digit percentages, according to analysts and consultants, with some
landing flat renewals.
The mild
increases largely match travel buyer expectations in a market where hotelier
leverage was limited by sluggish demand, an uncertain macroeconomic environment
and rising costs. Some sources indicated hoteliers generally were less resolute
in negotiations, reflecting their position in the market.
Buyers' success
in negotiations wasn't purely a reflection of market forces, however, as many
worked to direct volume to a limited number of properties in their program, a
process at times aided by AI tools.
The average U.S.
2026 negotiated rate, including last-room availability, at like-for-like
properties and programs for users of Cvent's transient hotel
request-for-proposals platform increased about 1 percent year over year, Cvent
VP of product management Brian Sullivan said.
"Buyers did a really good job of stabilizing fixed-rate growth in our system
this past year," Sullivan said. "It was very stable at 1 percent.
That was true on [last-room-availability] rates. That was true on non-LRA
rates."
That outcome
tracks buyer expectations logged in BTN's 2025 Hotel Survey. In that survey, 61 percent of 232 travel managers and
procurement executives surveyed in July and August last year indicated they
expected their organization's 2026 corporate hotel rates to be higher than they
are in 2025, but only 24 percent of all respondents expect those increases to
exceed 5 percent.
Tim Wagner, SVP
of global supply and operations for corporate lodging platform HRS, said clients
on average realized "minimal price increases of around 1 percent or
so" on existing properties in their hotel programs. When portfolio shifts
were considered including the replacement of higher-cost properties with
comparable but more affordable alternatives, "across clients we achieved
1.9 percent savings globally," he said. In the U.S., such savings were 4.5
percent across clients.
"There was
definitely a lot of buying power that we could yield last year in the market,"
Wagner added.
Beyond a Shaky
Market
Macroeconomic
caution and uncertain demand doubtlessly played a part in buyers' ability to
limit rate hikes, but so too did their hotel program strategy, said Jennifer
Nicholas, senior director of Advito hotel solutions.
Nicholas noted BCD
Travel, the travel management company that is the parent of the Advito
consultancy, had projected average daily hotel rates to increase in
2026 by 4.9 percent year over year globally. "Most of our clients are
faring in the range of a 3 percent reductions to a max of a 2 to 3 percent
increases," she said. "We're definitely coming in below what the
market projections were."
Nicholas noted
macroeconomic softness and geopolitical concerns are "shifting some of the
dynamics," she also pointed to buyers' success in consolidating their
volumes at fewer properties and shifting share to drive better pricing.
Partnership
Travel Consulting SVP Bob Brindley said that buyers' cost discipline furthered
their efforts.
"Corporate
demand is still pretty strong," Brindley said. "I do see clients
trying to figure out how they can control their own demand as a [method] of
cost savings. Every client is looking for ways where they can pull back, and
procurement is ground zero for that."
Dodges and
Concessions
Hotels' approach
to corporate negotiations for 2026 struck some beats familiar to travel
management veterans, including a typical push for dynamic pricing, leavened
with what appears to be a softer line on concessions.
Dynamic pricing,
a strategy that allows hotels to adjust the corporate rate based on demand at a
given property on a given date, for decades has been pushed by hoteliers as an
alternative to static negotiated rates, and many buyers have incorporated at least some dynamic rates into their program. This
year's approach was not different, although the realities of the market
prevented most hoteliers from enforcing any line in the sand.
"Hotels are
still pushing for dynamic rates," HRS's Wagner said. "But based on
the demand we are giving, they are also providing static rates."
Cvent's Sullivan,
whose company on Wednesday published an analysis of the 2026 hotel RFP season, reported
that 85 percent of accepted rates in Cvent's system were fixed for 2026,
slightly higher than the prior year.
"We still
see a real healthy amount of fixed rates in the channel," Sullivan said.
"That could be for a lot of reasons. Fixed rates are a function of buyers'
desire for cost containment. It's a function of demand, and it's a function of
concentration of buyer spend in a particular market to drive containment."
He noted some regional variation in dynamic rate acceptance: Buyers in Europe
were most likely to accept dynamic rates, but even there more than 80 percent
of accepted rates in Cvent's system were fixed. That figure is over 90 percent
in Latin America, he said.
About 78 percent
of Advito's client deals included last-room availability, up from about 65
percent four years ago, she said, and up slightly from one year prior. The
share of dynamic rate acceptance and non-LRA rate acceptance remained about the
same in 2026, she said, but "the change is coming from "chains or
hotels that previously provided a dynamic rate with a ceiling shifting to
LRA-only."
Hotels' overall
approach softened from the beginning of the negotiating process, Wagner said.
"The initial bids that hotels provided were a
bit more aggressive than last year, but they basically conceded throughout the
negotiation up to 2.5 percentage points to the finally accepted offer," he
said.
The uncertainty
of 2026 economic and demand forecasts undercut hotels' ability to take a firm
approach, Advito's Nicholas said.
"Hotels may
be a bit more cautious about committing inventory or committing discounts, and
that does make negotiations more difficult," she said. "On the supplier side, that could translate
into pricing [that] appears more reactive than strategic. And it creates some
negotiation opportunity that does play into the buyer's favor."
Converging on
a Solution
Incorporating
meetings and some extended-stay volume into the transient hotel RFP process has
generated some opportunity for buyers but also can increase the complexity of
the sourcing process for buyers and hoteliers. Still, Wagner said about 30
percent of clients have incorporated at least some aspect of such convergence
in their negotiations, producing what he called 2 percent to 3 percent
improvements in transient rates and up to 12 percent savings on meeting room
spend.
"Hotels see
this as a growth opportunity," he said, pointing to growing chain-level
awareness of the value of integrated spend and acceptance of the strategy.
While sustainability
remains a key aspect of many corporate hotel RFPs, particularly outside of the
United States, its influence this year perhaps was more muted than in the
recent past, Wagner said.
"Across the
board of all our customers, the economic reality is clearly more important
right now and gaining more importance," Wagner said, with savings
"more important than the sustainability aspect."