Tips for buyers
• Balance is key when negotiating: if buyers are sourcing correctly, they will already have the right hotel, star rating, user reviews and location, and thus be able to leverage volume into the appropriate hotel and drive down rates. This helps drive volume into these brands, strengthening relationships and enhancing your organisation’s buying power.
• Remember the objective: the lowest rate may not be the most cost-effective rate as negotiated prices often include airport or local transportation, breakfast, wi-fi, parking and other amenities.
• Make your case: emphasise a desire for consolidation of hotels in locations when negotiating with hotel brands, so they know if they are not competitive any volume they do receive is minimal ‘dislodged business’ due to availability.
• Embrace changes in the market: brands will continue to diversify, delivering new price points for all travellers, while the consolidation of hotel groups offers both advantages and disadvantages.
largely unbranded, although there are exceptions. Rotana Hotels and Resorts, for example, has grown over the past 25 years from its base in the UAE to become one of the region’s key players, with 56 hotels in 21 cities across 13 countries. Another 49 are in the pipeline. But the rules of the branding game are changing, as the major chains have in recent years embraced independent hotels – admit- tedly usually at the top end of the market – to neutralise the competition and to offer them the marketing and distribution benefits they already provide for their own brands. These so-called ‘soft’ upscale hotel brands, often also named ‘collections’, include the Autograph Collection from Marriott, the Ascend Collection from Choice, Hilton’s Curio and the recently launched Tapestry Collections, along with Wyndham’s planned Trademark Collection. Both the Tapestry and the Trademark brands are different, targeting the three- to four-star segment of the market; a sign that the ‘soft’ brand strategy is evolving. IHG is also believed to be planning a ‘soft’ brand in the near future in addition to its new midscale brand.
Yet independent hotels may also be worth considering in their own right by travel buyers, especially with the help of a TMC which can help identify the most appropri- ate properties in key destinations. “Using a Request For Proposal (RFP) tool means multiple channels of negotia- tion can be easily managed,” says Rachel Newns, hotel product manager for FCM Travel Solutions. “Used carefully, hotel loyalty schemes can also provide attractive personal benefits for travellers which help
to keep compliance within the corporate programme,” she adds. Yet doesn’t this seemingly endless roll-out of new brands and concepts threaten the individual business traveller – let alone travel buyer or manager – with a severe case of ‘brand fatigue’? Not so, says Stuart Birkin, director of account management at Corporate Travel Management. “It makes for a more competitive market as accom- modation suppliers pitch for the same corporate business and this should drive the costs down,” he says. But he admits that “all the brand name changes and launches can be difficult for corporates to keep track of, which makes it even more important to steer the buyer towards the hotel brand that’s going to provide the best service and valued-added benefits at the client’s price point.” Yet for all the focus on brands, the leading hotel chains sometimes appear to drop the ball. Marriott, for example, recently unilater- ally changed its room cancellation policy, requiring guests to give 48 hours’ notice (up from 24 hours in general) to avoid incur- ring a cancellation fee. Hilton followed suit shortly afterwards. The move upset travel buyers, accord- ing to a speedy online poll by lobbying group Business Travel Coalition, which found that some 59 per cent of buyers and TMC executives from a dozen countries who responded believed their business travellers would switch to another chain. Nearly one-third were also considering amending their travel policy to restrict bookings made with Marriott. An own goal or storm in a teacup? When you’re the world’s biggest branded hotel chain by a distance, such decisions matter.
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