MYSTERY BUYER… ON UK HOTELS
Our travel buyer works with a global media marketing brand
WE ARE SEEING A FASTER TURNOVER of hotels’ sales directors and corporate account managers, which means we – and they – have to start from scratch each time to build the bricks into a working relationship where the people we are dealing with understand our individual culture and tastes. One of the challenges is encouraging and training our travellers, and even our own clients, to give us feedback when they have experienced shortcomings during their stay. We can then regulate those that fall below our specifications on the supplier list. I’m not at all in favour of shifting to per diem allowances – that’s diametrically opposite to the strategy around our preferred supplier list. In London, we drive business to a limited group of preferred suppliers – it’s not mandated to use these hotels but it’s made clear that our bookers would need a good reason to place visitors elsewhere. In the UK and beyond, we have a ‘cap’ rate per global city for maximum allowable room rate per night. If they need to pay more, they have to give an explanation – the client is paying, the client is staying there, or the preferred suppliers are full. This way we build substantial volume and maintain our negotiated rates. In our business, per diem is passé. Within our own group we are recognising a new trend with our younger senior
directors, particularly from the digital creative areas, to break away from staying 'on top of the office'. They are still staying in London – no more than an hour from our office – but going for more quirky, emerging areas. During our last RFP [request for proposal] in September 2014, almost all
providers proposed increases of between 2 and 4 per cent in room rates. We negotiated some of them down, and dropped others from the programme. I see no evidence of the euro value impacting on our accommodation cost savings. A hotel is only as good as its investors are willing to make it. They must consistently maintain and upgrade their offering in order to retain and grow their volumes. It’s also only as good as the liaison between their sales people, their revenue managers and the general manager, working together and showing their client that they are not just being dictated to by some nameless, faceless bunch of conglomerates.
Strong December results contributed to “a great year” for the UK hotel industry
per cent over the year, while occupancy levels were 1.8 percentage points higher, resulting in a 7.9 per cent increase in revenue per available room (revPAR) Elsewhere, increased corporate and
group travel boosted the fortunes of Edinburgh’s hoteliers, who saw trevPAR (total revenue per available room) climb 4.2 per cent and gopPAR up by 5.1 per cent.
STRONG DEMAND
Demand shows little or no sign of abating. Paul Wait, chief executive of the UK’s Guild of Travel Management Companies (GTMC), reports that while his organisa- tion’s members are seeing slower growth in air travel transactions, corporate demand for accommodation continues to increase at a considerably faster rate. The Global Business Travel Association’s
report double-digit average rate increases in 2014.
London prices shot up 13.1 per cent to
an average of Ð179.05 (roughly £135), but STR says that increase was comfortably exceeded in Manchester, where average room rates climbed 14.6 per cent to Ð94.44 (around £70).
And while the assessments of the actual
figures may vary, the trend is clear. TRI Hospitality’s latest round of Hotstats – a
BUYINGBUSINESSTRAVEL.COM
measure of chain hotels’ performance – indicates that prices and profits are on the up. Strong December results contributed to “a great year” for the UK hotel industry, the number-crunchers say, with gross operat- ing profit per available room (gopPAR) showing growth for London and the UK provinces, with hoteliers in southwest England faring particularly well. TRI reckons hotels in the south west increased their average room rate by 5.2
research arm, the GBTA Foundation, sug- gests that UK domestic business travel expenditure, which was forecast to rise 5.6 per cent last year, is on course to increase by a further 7.7 per cent this year. The main counterbalance to all that is 'supply' – with more rooms to be fill, the hotel sector will be forced, in theory at least, to compete on price. The numbers are unquestionably im-
pressive. In June last year, PWC calculates, there were around 23,000 rooms in the UK development pipeline, more than 10,000 of them in London. Outside London, cities with the largest pipelines included Manchester (1,900 rooms), Edinburgh (1,370 rooms) and Birming- ham (1,055 rooms), closely followed by
BBT MARCH/APRIL 2015 75
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