Corporate negotiations focus on rates, relationships
Jun 01, 2011
Hotel companies should expect to enter the next round of corporate negotiations with an upper hand in pricing, though short-term rate gains shouldn’t undermine long-term relationships, experts agreed.
“Most parties understand that long-term relationships matter a lot. Going into 2011 and 2012, there will be increases in average daily room rate. The question’s just by how much,” said Jan Freitag, VP of global development for STR, the parent company of HotelNewsNow.com.
“Hoteliers are in a much better bargaining position than (they) were two years ago,” he added. “It looks like group travel is back. It looks like leisure travel is back to a degree. Individual business travel is back as well.”
As executive director of the Association of Corporate Travel Executives, a group that represents more than 30,000 executives in all walks of business travel, Ron DiLeo always advises members to keep a long-term perspective in mind.
“You have people chasing rooms now as opposed to rooms chasing people. Travel is up and capacity is tight, so the rates are probably going to be going up in this round of negotiations,” he said.
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