Despite a blip in the recovery during August, when market-rate growth flattened and pricing volatility increased, hotel booking volume again is on an upward trajectory and volatility is down once more, according to Tripbam's third-quarter market report. "The dip we saw was related more to late summer holidays than it was to long-term concerns about the [Covid-19] delta variant," according to the report.
The hotel reshopping firm on Sept. 12 assessed data from the previous 30 days and compared it with figures from the same 30 days in 2019. Tripbam used the same customer set it had in 2019 for a like-for-like comparison.
The company found it had processed about 31 percent of the volume as in 2019, but the average length of stay has begun to return to what it was two years ago, said Tripbam founder and CEO Steve Reynolds during a late September webinar that reviewed the findings. With mostly essential travel happening during the height of the pandemic, the average length of stay had been four to five days, but has returned to a more normal 2.5 days, he said. The 11-day booking window before travel still was shorter than the 16-day window of 2019.
Global market rates were down 28 percent for the 30-day period in 2021 compared with 2019, from an average of $234 to $168, while global booked rates were down 22 percent, from an average of $195 to $150, according to the report.
Looking at rates from a discount level, hotel programs in 2019 delivered about 18 percent in value across all clients, Reynolds said during the webinar. Currently, that percentage is at 17 percent, so there is a "bit of a ways to go to get the same percentage value," he added.
The report projected that global business travel hotel bookings by year-end would be between 40 percent to 60 percent of 2019 levels. As of the end of 2022, Tripbam expects global business travel hotel bookings to reach 80 percent of 2019 volumes, and the company expects that reduction to remain long-term based on conversations with corporate buyers.
Tripbam also anticipates that market rates will reach 2019 levels by the first quarter of 2022 and likely exceed 2019 levels in the subsequent quarters. "Don't roll over rates," Reynolds said. "Get programs in place now so they're in a good position for 2022. We think [rates] will go up, and we can argue that a static program might be the way to go, and we can argue dynamic might be the way to go. It depends on the market."
Further, the report cautioned about dual-rate loading. Some companies worked with hotel partners to introduce dynamic rates and to roll over 2020 static rates, which would in theory act as a rate cap in 2021. But Tripbam found during contract audits that dual-rate loading was often having the opposite effect—the static rate was acting as a floor rather than a cap, leading companies to pay more. "The concern is that some hotels don't have the technology to support it the way it is being sold," Reynolds said. "You need to [perform] audits to make sure it's working. For major chains, it is working as promised, but with some smaller brands, there are some problems."
Tripbam also provided an update on its new air offering, which is in beta with about eight clients, said VP of air solutions Tim Nichols. "It's up and working," he said. "We're looking at reshopping and rebooking, that is the core of what the solution does." Early findings show that it is producing savings "in the mid-teens [percentages] and increasing." The company expected to run the beta for about another month.
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