About 62 percent of HRS's travel and procurement client respondents anticipate opportunities to reduce hotel room rates and gain more flexible terms and conditions for the balance of 2020 and beyond as coronavirus-related travel restrictions are lifted, according to a client survey the Germany-based hotel solutions provider conducted. And 51 percent said they anticipate issuing requests for proposals to achieve that goal, according to HRS.
In exchange for hotel supplier flexibility as business travelers get back on the road, 81 percent of respondents said they are willing to negotiate 15-to-18-month contracts, covering the rest of 2020 and the full 2021 calendar year. Further, 58 percent anticipate reducing the number of suppliers they work with, offering preferred hotel partners the opportunity to win more share from existing corporate clients.
"Our industry is suffering through previously unimaginable hard times, with suppliers and other parties all resource-challenged due to layoffs and furloughs," said HRS CEO Tobias Ragge. Still, "it's two different parties with two different interests coming together, and everybody wants to optimize their position. From a corporate and procurement perspective, [looking for better deals] is what they have to do professionally. No one can afford to leave a given market situation like this out of their hands."
Ragge added that the corporate community is focusing on what is important to them. "Let's look at core destinations, core strategic partners and not get lost in the longtail discussion," he said. "Also, give these partners maybe more commitment. … From my perspective, this is a win-win opportunity for everybody if they're focused on core suppliers, focused on maybe a period where they negotiate for a validity of the next 18 months, and if they're willing to consolidate the supplier base, [with] bundling volumes, maybe bringing in extra transient off the meeting and groups piece, the project business and longer stays that in the past have been negotiated independently, and commit to driving market share."
One additional survey finding is that 86 percent of respondents will prioritize hotel partners with revised, specific Covid-19 hygiene protocols in place.
Corporate buyers and procurement professionals also want to demonstrate their value and the value of the managed program, Ragge said. "Today's business traveler instinctively shops hotel rates more than ever before. It's vital that managers promoting their managed travel changes for safety reasons have the best rates in those channels as well, as it directly impacts the integrity and reputation of the program across the company."
HRS had 207 respondents to the survey it conducted from April 30 through May 4 of its client travel buyers and procurement executives.