Catering to a Moving Target

Brands across the industry are working to stay relevant at a time when the tastes and expectations of hotel guests are rapidly changing. Corporate travel buyers in Business Travel News' 2017 Hotel Survey gave top marks to brands that are deploying initiatives and technologies geared toward meeting the individual preferences of a diverse traveling population.

BTN's survey ranked brands across seven tiers. Of last year's winners, only one brand returned to the top: Marriott International's Ritz-Carlton came in first place for the second consecutive year in the luxury tier. Among the multibrand hotel companies, Marriott and Hyatt Hotels Corp. had the strongest overall performance—each had five brands finish in the top three of their respective tiers. Hilton had three brands finish in the top three, while InterContinental Hotels Group and Best Western each had two.

A Critical Crowd

This year, BTN added a new criterion to the dozen by which it traditionally has asked travel managers to rate brands. The new factor: overall traveler satisfaction.

More corporate programs are taking travelers' opinions into account, whether the goal is to increase compliance and save money, to aid in employee retention or to embrace a changing culture. "We have definitely seen more and more customers that are becoming more flexible or more focused on traveler satisfaction than we have in the past," said Eric Jongeling, director of Americas hotel solutions for Carlson Wagonlit Travel.

In this environment, BTN wanted to see whether the brand preferences of travel managers vastly differed from those of their own travelers. For the most part, the two tastes aligned. In five out seven segments, the first place brand also scored highest for traveler satisfaction. However, some brands that didn't make it into the top slots, such as Four Seasons, tied with the first place finisher for this criterion.

Overall, however, travel managers are the ones who may be less satisfied with hoteliers and their brands. Excluding the new criterion, the top brands in all seven segments received the lowest total scores since 2013. Jongeling said the lower scores may be the result of travel managers expecting more. "There is an expectation in terms of better service, more personalized service—free Wi-Fi absolutely being kind of a requirement now."

BTN's report also comes at a time when hoteliers, including Marriott and Hilton, are introducing stricter 48-hour to 72-hour cancellation policies. "A lot of our customers feel like, 'You're pushing this on us without us having any input,'" Jongeling said. "It becomes a give-and-take. They're saying, 'Well, if you're going to push these things, you better deliver something that benefits us in return.'"

The lower satisfaction from travel managers comes also as the lodging options for corporates are expanding, thanks to increased awareness around corporate housing and to strengthening corporate positions among alternative players like Airbnb.

The current hotel cycle appears to be heading for a downturn. From January to July, year-over-year U.S. hotel demand growth, at 2.3 percent, still outpaced supply growth, 1.8 percent, according to STR. But supply is exceeding demand already in upper-upscale, upscale and upper-midscale, where most of the industry's new construction has occurred in recent years.