Hotel reshopping and analytics technology provider Tripbam says corporate travel managers should be working to obtain discounts in their contracts now, before rates and occupancy start to increase as business travel returns.
Analyzing the impact of the COVID-19 pandemic on the corporate hotel space, Tripbam says it has found shifts related to rates, star rates, locations and booking trends. The data, included in Tripbam’s Quarterly Market Report, comes from the corporate transient travel bookings of its 2,000 clients around the world.
The average market rate at the end of January – which is the lowest corporate rate available in a market – is down 41% compared to the same time last year, dropping from $205 to $120, while the average booked rate has dropped from $175 to $116.
Tripbam CEO Steve Reynolds say rates continue to trend down.
“Volume has kind of flatlined or it’s trending up a little bit for seasonality into January, but the rates continue to go down,” he says.
“Is there an end in sight? Probably. We are bouncing along the bottom maybe, but we are still seeing that trend down.”
The overall drop in rates caused by the COVID-19 pandemic means that the gap between market and booked rate is also shrinking – from an average of 25% last year to just 16% now – diminishing the value of the corporate hotel program.
And data about traveler booking behavior reflects that: Tripbam says corporate travelers are booking the negotiated static or flat rate less often – down 37% year-over-year – while the booking of publicly available rates is up 46% and loyalty rate bookings are up 583% in that same period.
“The static rate I negotiated, that I rolled over, is exceptionally high, so what I thought was a 25% discount when I did the deal back in 2019 for 2020 is now only 5 to 10% above the best available rate,” Reynolds says.
“You’ve got to get a rate that’s more in line with reality. You can’t rely on historical data anymore to determine or benchmark that discount.”
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