With the industry enjoying strong occupancies and ADR in many markets the past few years, corporate travel buyers have become increasingly frustrated with their inability to negotiate volume discounts. Hotels that were willing to give concessions on rate in return for volume commitments in less prosperous times have become selective. Yet hotels still value their relationship with their corporate accounts, especially in key markets that depend on business travel bookings midweek.
At a recent briefing here, American Express Business Travel senior practice leader for hotels Priscilla Campbell described how corporate buyers and hotels can best work to meet their common objectives.

?Depending on the strength of the client?s program, we?ve seen increases in rates in the key cities of anywhere from 5%-13% over 2006,? Campbell said. ?These are fairly substantial increases. It was a very difficult negotiating season, one of the toughest in recent history. Especially in markets like New York, Chicago, San Francisco, and Boston, availability is still a real challenge for travel managers and as a result hoteliers are getting a premium cost for their rooms.?

Given that travel managers may have had to absorb significant increases in 2005 rates over 2004 and 2006 rates over 2005, rate hikes for 2007 have had an even greater impact. According to the American Express Business Travel Monitor, the average domestic booked hotel room, which cost $182 in the fourth quarter of 2005, sold for $200 per night a year later.

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