Hotel Contracts The Value Proposition

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Hotel Contracts The Value Proposition

• Scott Allison
• Vice President, Sales Marketing - Marriott
  Hotels of Canada
• Peter Maltby
• Director of Travel Partner Relations, The
  Americas, Hilton International
• Tanya Pratt
• Director, Electronic Distribution Marketing -
  Delta Hotels
• Moderator - Onita Dey
• Business Development Manager, TQ3

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Hotel Contracts The Value Proposition

• PhoCusWright Inc. recently suggested that while
  corporations will relax travel and budget
  restrictions, corporate travel will retain a far
  more disciplined ROI approach. This means that
  hotels will continue to be pressured for rate
  concessions or value-adds, while corporations
  will be asked to improve compliance. With
  transient business travel recovering more slowly
  than anticipated, fierce competition for share of
  wallet from key accounts will continue. At the
  same time, both the supplier and the customer
  will continue to carefully manage the ROI of the
  relationship against the expectations outlined in
  the contract.

3
Do hotel contracts still work for the corporate
travel program?

• Contracts are a valuable part of the agreement
  but it is only the start of a relationship.
  Compliance, however, demonstrates the ability of
  the programme to move market share, fulfil the
  contracted volumes and add value to the
  partnership. Conditions of booking lower,
  promotional rates are often not appropriate for a
  business traveller even though the rate is
  appealing.

4
What new technology trends are emerging and how
are they affecting how your organization buys
travel?

• Booking channels are becoming quicker and more
  common place. Consistency of rates and
  availability are even more important, especially
  where there are multiple parties involved in the
  booking process. Hotels are starting to take
  control of their pricing and how they are
  represented on 3rd party websites

5
Where is the integrity of contracts vs web
pricing?

• Hotels are increasingly managing their own rate
  structures through the 3rd party sites and
  limiting access only to those merchants who offer
  transparent rates (IE the actual rate paid to the
  hotel is shared with the traveller). The largest
  chains are also now offering price guarantees, to
  protect the traveller, the website and the chain
  themselves from lost revenues and inconsistent
  pricing.

6
What are some of the trends for a non-managed
corporate program?

• The use of a TMC (Travel Management Company) or
  consortia agent can be one solution where volume
  rates have been negotiated with Global players at
  Parity. This can also be adopted in secondary
  markets where volumes are too low to warrant
  discounted corporate rates. Credit card and
  Agency data can offer the potential for control
  eventhough the programme is unmanaged

7
What are the trends towards incorporating
meetings groups into the corporate
negotiation?

• This is a growing trend in the local or domestic
  market place although international conference
  and incentive destinations tend to be outside the
  usual travel pattern and do not form part of the
  annual programme due to the nature of the event
  and destination
• Typically, smaller groups will be a consideration
  when negotiating an annual negotiated rate as
  larger groups will, be nature, demand lower price
  points due to volume

8
With the diversity of hotel product ranging from
limited to full service, how can a travel buyer
use all levels of hotels within a program?

• Each hotel satisfies a different need, from long
  term suite products and focused service to the
  traditional International full service and
  boutique hotel. Depending on budget, location or
  even image every corporation is using multi
  levels of product for incentive, board meetings,
  road warriors, engineers etc. Loyalty programmes
  across products keep the guest loyal, when he is
  on business or leisure.

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Hotel Contracts The Value Proposition

• Further Discussions?