The number of corporate transient hotel requests for proposals issued through Cvent's business transient product for 2021 declined about 35 percent year over year, Cvent officals said this month, and those clients that issued RFPs typically included fewer hotels. Several clients rolled 2020 negotiated rates into 2021, said Cvent VP of sales Janine Alsalam during this month's Cvent Travel Summit.
Still, she said, overall business transient RFP volume increased by about 5 percent year over year, due to RFPs received from agency consortia.
The typical late-summer-into-fall annual hotel RFP season in 2020 was delayed, Alsalam said, and Cvent didn't start to see a pick-up in requests until mid-fall 2020, then continued to see 2021 RFPs into February.
"For those companies that sent RFPs in both 2020 and 2021, 69 percent of them sourced fewer hotels than in previous seasons," Alsalam said. "Overall, for those companies that sourced in both years, their program size is about 78 percent of what it was in 2020."
An average 30 percent reduction in the number of cities included in RFPs primarily drove the typical program decrease, followed by a decrease in the average number of properties sourced per city, Ansalam said, noting the latter figure declined from an average of 2.5 to two. Programs that increased in size on average sourced 53 percent more cities, with a small uptick in the average number of properties per city included in their programs.
Cvent also noted a slight shift in the type of properties sourced toward lower-cost options. The share of economy hotels included in RFPs was up 1.3 percent year over year, followed by a 0.7 percent increase in independent properties and 0.5 percent increase in midscale properties. The largest share declines were seen in upscale (down 1.3 percent) and upper upscale (down 0.9 percent). The trend varied by region, however.
"Generally speaking, the U.S. and Latin America have the larger share of economy and midscale hotels being solicited, and that's followed by Europe," Ansalam said. "In Asia-Pacific, [the supply] sways more toward upper-upscale and luxury, and that downturn was not seen [there]. Those luxury properties retained or increased their share in Asia-Pacific, whereas in Europe and to a lesser extent in the U.S., there was a bit of a shift downscale."
Transient Rate, Amenity and Volume Trends
Overall, Cvent said the average accepted weighted 2021 rate compared with the 2020 season dropped 5.3 percent, but that fluctuated. In the fall, rates were running about 10 percent off, then closed the gap, and that differed by chain scale, said Cvent senior director of analytics Jeffrey Emenecker. The average economy rate actually increased slightly, by 2 percent. Average rates at all other chain scales decreased from 2 percent for luxury to 7 percent for upscale and independent hotels.
There were no major differences in accepted amenities for the 2021 RFP season compared with the 2019 and 2020 seasons, according to Cvent. Free parking was included in 54 percent of accepted bids, down from 57 percent in 2020. Complimentary breakfast was included in 60 percent of accepted bids for 2021, down a tick from 61 percent for 2019 and 2020. The only increase in acceptance was for complimentary wireless access, included in 79 percent of the accepted 2021 bids, compared with 76 percent in 2020 and 74 percent in 2019.
Less negotiating occurred for the 2021 season, with the difference between submitted and accepted bids just 0.4 percent, compared with 2.6 percent during the 2020 season, due to a lot more rolling over of rates, Emenecker said.
The accepted average weighted rate by top cities didn't change significantly for most markets, with declines coming in at less than 10 percent for many locations, including New York, Chicago, San Antonio, Houston, London, Singapore and Beijing. Average rates rose slightly in Tokyo, Barcelona and Rome.
RFP volume by city, however, told a different story. New York was down 42 percent year over year, followed by Chicago, down 35 percent. Other cities down between 23 percent and 27 percent include San Antonio, Houston, London and Singapore. Bangkok saw the lowest drop in volume, with a decline of just 2 percent, followed by Paris, down 4 percent, and Rome, down 6 percent.
Some markets traditionally not the highest in terms of volume did see some year-over-year changes "that ultimately did bring that overall RFP volume number up 5 percent," Emenecker said. "Some of those other markets showed a little bit more strength than the very largest markets."
Travel Buyer Survey Data
Meanwhile, about 74 percent of corporate travel decision-maker respondents in the U.S. and 51 percent in Europe expect per-trip budgets for 2021 to increase over those for 2019, according to a survey Cvent conducted Feb. 4-12 of 715 respondents from the U.S. and Europe, including the U.K., Germany, France, Spain, Italy and the Netherlands.
Only 15 percent of U.S. respondents expect a per-trip budget decrease, while 32 percent from Europe do. Factors influencing the expected budget increase include longer stays, prioritizing additional safety measures and different types of F&B amenities.
For all the talk in the past year about switching away from purely static rates and discounts, Cvent didn't see a big shift toward dynamic rates for with 2021, Ansalam said. However, 74 percent of U.S. survey respondents said they would request dual or dynamic rates during the 2022 sourcing season, and 18 percent were not sure. In Europe, 59 percent plan to request such rates, with 25 percent not sure.
A majority of respondents also said they believe that some business trips even after travel returns will be replaced by videoconferencing, with about 36 percent saying 26 percent to 50 percent of trips will be replaced, and another 34 percent saying between 11 percent and 25 percent will be replaced. The types of travel in declining order that respondents didn't feel would be replaced include sales trips or client and prospect visits, trade shows, engagements and projects, conferences, service trips and internal meetings.
Cvent also found an uptick in the number of respondents responsible for managing both travel and meetings and events, from 83 percent in the 2020 survey to 90 percent in 2021. When asked what these respondents needed from hotels, the No. 1 priority was high-quality health and safety protocols, followed by Covid-19 tests at hotels. Negotiated amenities came in third, so even though there weren't that many changes for amenities in the 2021 sourcing season, buyers will be looking for them in 2022, Ansalam said. Buyers also are looking for meeting space at hotels, larger rooms for working within the guest room, more flexible rate negotiations and more outdoor space, she said.
During the summit, Cvent also announced several upcoming changes to its hotel RFP tool.
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