Hotels
Loyalty programmes are still an effective way of rewarding business and leisure customers. “We give them benefits when they stay in the hotel, and attached to that are free wifi, automatic upgrades and sometimes complimentary wine with dinner,” says CEO of Focus Hotels Management, Peter Cashman. “At the moment, occupancy is not the issue – rates are because hoteliers have been discounting them and corporates are asking us not to give any increase. Where they can, they are dictating how much they will pay. We are finding that in the mid-market and four-star sectors everybody is driving for price and added items in the price. And in RFPs [requests for proposals] they dictate things you must include in the offer – wifi, parking, breakfast and so on. It makes it very tough for us.” Inmarsat has been asking hoteliers not to raise charges. “In some cities that has been fine; in some, we have negotiated a small increase but we have certainly not accepted the increases of previous years,” says international travel and relocation manager Caroline French. Focus has occasionally turned
away business. “People have sometimes come back because they have got a better price elsewhere but have not been happy with the hotel – or staff have not been happy,” says Cashman. And that is a salient factor: there is no point is going for the lowest rate if the compromise on quality leaves all parties heartily dissatisfied. He says the Focus management group has actually raised rates where they are no longer in line with the local market. “We expected the client to walk, but they didn’t – they offered to renew the contract.”
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BACK TO BASICS Puma Hotels has also recently put up tariffs at The Oxford Hotel, Oxford. “That hotel is running at 82 per cent occupancy and since we put up rates, we have seen a 9 per cent lift in RevPAR [revenue per available room] in six weeks,” says CEO Fredrik Korallus. He adds that it’s important to get the basics right: “We need to make sure we have the best breakfast in town and ensure that our free wifi is also the right quality bandwidth.” Tailoring an offer to the client is an important part of the appeal and Puma’s Shrigley Hall, outside Manchester, won corporate business against local competitors by
providing transport to the company’s local offices. In addition, on the group’s website, there is an offer for those able to book 21 days in advance to save up to 30 per cent on bed and breakfast stays.
WELL POSITIONED With four central London properties, Park Plaza Hotels (PPH) is well positioned to serve the corporate market. “Our guests are planning their stays primarily based on location, then price point and the quality of product for that price point,” says Greg Hegarty, regional general manager for Park Plaza in London. “In
Loyalty programmes are still an effective way of rewarding business and leisure customers
addition, we provide added value for guests by giving extras both in terms of experience and offerings.” PPH is offering a 20 per cent
discount for bookings made between three and 21 days in advance, which has been such a success the group has now introduced it across the brand; and an upgrade package from £25 for around £40-worth of perks that include access to the executive lounge (where available), buffet breakfast, free unlimited wifi and late check-out. Apex Hotels also provides free wifi, which guests, especially business travellers, say they value. “It is not only that it is free but that it is fast, reliable and simple to connect,” says marketing director Lorna Lee. The group is offering a £10 voucher per room for booking direct either by central reservations or its website, and this can be redeemed against lunch, dinner or drinks in the bar, or spa treatments where available. Hyatt Hotels has been offering a discount on breakfast, which
proved particularly popular during the height of recession in 2009. And in 2011, Jurys Inn launched Jurys Business Booker, an online service that allows booking and management of client corporate travel online, with Jurys Rewards points earned for every booking made. It is available to those who book a minimum of 15 room- nights per annum and members are furnished with a negotiated business rate and payment options as required. This provides business bookers with the best available rates at any given time, so that they are not held to negotiated rates, and they can track and review travel spend, see who has stayed where, and print out reports. Although more and more properties are offering free wifi – though some of dubious quality – it still often a sticking point in negotiations, according to head of UK hotels and venues programme for PWC (Pricewaterhouse Coopers), Samantha van Leeuwen. “We always tie offers into our negotiations and, for transient accommodation for up to 20 people, we have F&B [food and beverage] discounts, breakfast where we can, and then wifi or internet access,” she explains. “We have had that for years but the only bugbear is, with wifi or broadband, we can’t get it without a charge because hotels are still professing to be tied into long- term contracts.”
She says it particularly affects the
firm’s meeting programme. “If I want a meeting room for 50 people, I want them to have access to the internet. I asked for that in a London hotel and they asked for another £1,800.” In today’s climate, for some companies that's not an insignificant sum. So what happened when this particular hotel failed to add value? Says Van Leeuwen: “We took the business elsewhere.” ■
RATEABLE VALUES
THE PWC UK HOTELS FORECAST 2013 expects to see rates challenged by all categories of user. The report states: “High London ADR [average daily rate] growth in 2011 makes for tough comparables," forecasting end of year figures of a 1.2 per cent ADR gain for London compared to a 2.1 per cent decline in the provinces for 2012. And the overall picture for the UK in 2013 doesn’t look too good for hotels, with
a forecast decline year-on-year of 1.1 per cent in occupancy, 0.5 per cent in ADR and 1.9 per cent in RevPAR. “Rates for 2013 are a lot softer because buyers had to take an increase for 2012 and hoteliers realise they cannot be aggressive for next year,” says PWC travel buyer Samantha Van Leeuwen. If hoteliers are having to lower rates, or at least not raise them, there may be fewer deals available in 2013. Watch this space.
JANUARY/FEBRUARY 2013
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