Travel buyers are looking to capitalize on weak hotel markets to garner additional savings in 2010

In this issue of The Wire…from AirPlus, we asked 142 travel management professionals in September for their thoughts. They hope to capitalize on the weak hotel markets which in fact may not be so difficult to do. The overall hotel market projected to decline further next year, and hotel suppliers looking to lock in corporate travel and meetings contracts that will help keep their occupancy levels up.

Not surprisingly, more than 72 percent of respondents to the survey revealed that 2010 corporate travel budgets for hotels would either stay the same (40.1 percent) or decrease (32.4 percent). The good news for travel managers under the intense pressure to buy more travel with less money is that hotel volume based on total nights would remain fairly steady as well: 43 percent of respondents indicated that hotel volume would stay the same and 28 percent said that volume would decrease. Although, some travel managers will feel the pressure with 28 percent of respondents who said their hotel budgets will stay the same also expect volume to increase; and only 4 percent of respondents will grapple with falling budgets and rising volume. For a small percentage, volume will fall, while budgets will increase (3.2 percent of respondents).

Despite this, the majority of respondents in all budget categories said they will focus on getting additional room rate discounts in their contract negotiations. The next most popular negotiation method will be obtaining for more value-add items within the room rate. Dynamic pricing, which came in at the bottom of the list, but still will be negotiated by nearly 20 percent of survey respondents, is an interesting approach that may work well in a hotel market that is not expected to regain its footing until well into 2010.

Download the full report for complete results:

AirPlus… The Wire September 2009 (PDF, 257 KB)

Additional Resources:

Buyers Eye 2010 Hotel Challenges, Opportunities

Hotels Renegotiating Rates to Preserve Corporate Business

U.S. Lodging Turning Point Arrives But Growth Remains on Distant Horizon