American Express said its Worldwide Select traditional fixed-rate hotel consortia program was getting less utilization in the face of low prices through the global distribution systems, as well as on the Web, even though many such rates come with restrictions. The company is replacing that program next year with a changing rate model, where it provides corporate clients with a not-yet-disclosed discount off the best available, unrestricted room rate.
As it affects consortia rates, American Express' decision is consistent with recent moves by Marriott International, Starwood Hotels & Resorts Worldwide and other hoteliers to counter the growing success among merchant-model Internet sites in selling hotel rooms
(BTN, Nov. 10). Consortia rates are used widely by travel managers who do not have enough room nights in a destination to warrant a negotiated rate of their own.
"We've been seeing lower rates all over the place competing with the fixed-rate program," said an American Express spokesperson. "We're not going to compete with the non-refundable or partially non-refundable rates typically available on the merchant-model rates, though we think our prices will be very competitive with the merchant models because there's a huge difference between what the customer pays and what the merchant-model people pay."
Hoteliers have voiced unhappiness with the new approach
(BTNOnline, Nov. 18), partly because it commits them to a discount off their best available rate.
According to American Express, its rates will apply to larger inventory at the hotel than the merchant-model sites offer. "So rather than a limited number of rooms per property, it would be best available rate across the property," the spokesperson said, noting that the program officially still is in development and has not been named. She would supply neither the names of hotel chains participating nor the specific discount Amex is negotiating.