My my, how things change in a few short months in the corporate travel industry.
February headline: “Why it’s a ‘Buyer’s Market’ for Corporate Hotel Rates.”
June headline: “Corporate Hotel Rates Set to Hit 2019 Levels by Year-End.”
Thank you to corporate hotel service provider Tripbam for sharing the following data points on corporate hotel demand and prices. Tripbam reports that while recent corporate bookings are only 30% of similar 2019 volumes, prices are rising 10% month-over-month and could, as the headline suggests, get back to pre-pandemic levels by the end of 2021.
You might have some questions. Why is this happening? Did you miss the boat on locking in rates? Are higher hotel rates going to keep your team off the road and away from customers or jobs?
AmTrav has answers.
Why is this happening? Prices are rising in part because hotel labor shortages and slow new-employee recruitment are limiting room availability and quality of service. So supply is limited while demand increases. We know for example that corporate air bookings have doubled from 15% of 2019 levels to 33% of 2019 levels since February, on top of leisure booking levels increasing from 50% of 2019 levels to 80% of 2019 levels.
Let’s pause here to note that demand has increased because we’re justifiably feeling safer and more willing to travel, new COVID cases in the U.S. have dropped from 100,000 a day in February to 10,000 a day in June -- this is worth celebrating 🥳!
Did you miss the boat on locking in rates? Nope. AmTrav Relationship Managers are still helping clients secure rates even in hotspots like California and North Carolina within the last couple weeks. (Admittedly our Relationship Managers do report that hotels are a little slow - both the front desk and the sales staff are understaffed.) You can always improve your program by strategically negotiating with a couple of key hotels in a specific region and taking advantage of AmTrav’s brand-wide agreements. (Which brands? Reach out to your Relationship Manager - they’ll tell you!).
Are higher hotel rates going to keep your team off the road? Probably not. Remember, we’re just predicting 2019-level rates, not higher rates. Assuming your team’s time on the road is just as valuable as it was in 2019 (it probably is), then hotel costs aren’t going to overwhelm the business value of getting your boots on the ground to meet clients face-to-face, get work done and grow your business.
So it’s time to be strategic. Check your hotel program, if you’re not happy with the rates you’re getting or think you could concentrate room rates in certain areas, reach out so we can help you save money on hotels -- it’s never too late.