Recent research led by Bjorn Hanson at the Preston Robert Tisch Center for Hospitality and Tourism and the School of Professional Studies shows that negotiated rates are on the rise for 2015. Due to business meeting demand and a corporate rate growth plateau over the past five years, the research forecasts the rates will more closely parallel the industry’s rising leisure rates.
Based on Hanson’s findings, “From 2009 to 2011, corporate rates didn’t change much, so now the sales side needs to catch up.” Despite an increase of 1.5 million group rooms sold from 2013-2014, corporate rates have remained relatively stagnant.
Post-financial crisis trends include fewer meeting attendees and shorter meeting lengths. Meals are often scheduled during the meetings (in place of large banquets), leaving evenings open for business travelers. Because corporate negotiated rates account for nearly 20 percent of occupied room night revenue in the U.S. hotel industry—and 30 percent of the U.S. lodging industry—Hanson estimates that rates will rise by 5.5 to 6.5 percent in 2015. The average increases for 2014? 4.5 percent.
A Change in Booking Strategies A common practice in the last several years: travelers often seek last minute lodging or airfare to find the best possible rate. As demand is rising for both business and leisure, hotels are no longer as eager to fill unoccupied rooms for a low cost. Longer booking windows are a better strategy to attain corporate negotiated rates, allowing business travelers to book in advance.
Another advantageous strategy for corporations is to integrate policy compliance with a travel booking system—especially if business travelers are booking their own accommodations. With online booking sites, noncompliant charges often slip through the cracks, and with travel agencies, fees can be a costly expense. Combining automated policy reinforcement with self-service travel booking will impact many aspects of corporate travel as the hotel industry evolves.
At Certify, we tackle compliance issues through our tight integration with the top travel agencies for corporate travel. Click here to see how our online travel booking system works. To learn more about Certify’s cloud-based expense management.
Based on Hanson’s findings, “From 2009 to 2011, corporate rates didn’t change much, so now the sales side needs to catch up.” Despite an increase of 1.5 million group rooms sold from 2013-2014, corporate rates have remained relatively stagnant.
Post-financial crisis trends include fewer meeting attendees and shorter meeting lengths. Meals are often scheduled during the meetings (in place of large banquets), leaving evenings open for business travelers. Because corporate negotiated rates account for nearly 20 percent of occupied room night revenue in the U.S. hotel industry—and 30 percent of the U.S. lodging industry—Hanson estimates that rates will rise by 5.5 to 6.5 percent in 2015. The average increases for 2014? 4.5 percent.
A Change in Booking Strategies A common practice in the last several years: travelers often seek last minute lodging or airfare to find the best possible rate. As demand is rising for both business and leisure, hotels are no longer as eager to fill unoccupied rooms for a low cost. Longer booking windows are a better strategy to attain corporate negotiated rates, allowing business travelers to book in advance.
Another advantageous strategy for corporations is to integrate policy compliance with a travel booking system—especially if business travelers are booking their own accommodations. With online booking sites, noncompliant charges often slip through the cracks, and with travel agencies, fees can be a costly expense. Combining automated policy reinforcement with self-service travel booking will impact many aspects of corporate travel as the hotel industry evolves.
At Certify, we tackle compliance issues through our tight integration with the top travel agencies for corporate travel. Click here to see how our online travel booking system works. To learn more about Certify’s cloud-based expense management.
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