HOTELMARKETING.COM

Buyers seek ways to keep hotel room costs manageable

May 11, 2007 | Hospitality Industry

While hotel room demand is up and availability limited in European capitals such as Paris, Moscow and London, corporate buyers are working on strategies to keep the costs down. Buyers are considering a variety of ideas, from avoiding those cities altogether to patronizing independent properties.

Corporate buyers are creating alternative strategies to contain runaway hotel rates in such key European cities as London, Paris and Moscow, where availability is limited and demand is strong. Most experts agree there is almost no prospect of rates flattening, let alone falling, in those cities in the foreseeable future.

Buyers are considering such ideas as negotiating earlier in the season, switching to independent properties, trading down, negotiating for non-room rate items and avoiding those cities.

The root problem, according to John Licence, Europe and South Asia vice president of international sales for Marriott, is that “occupancy is well into the 80s in all three cities.”

According to Robert Barnard, partner for hotel consultancy services at PKF, in London “that effectively means hotels are not completely full on the odd Sunday night and during the winter.”

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