Technology opening up hotel market possibilities
Technological advances such as content aggregators and reshopping tools are changing the travel landscape. Technology now allows huge amounts of hotel content and different rates to be available within approved channels, providing a more satisfactory outcome for travel managers and travellers alike. According to CWT Solutions Group, a fixed negotiated rate is best suited to those companies that can guarantee very high volumes in particular cities. The consultancy’s research shows that companies with at least 150 room nights in a city can achieve a 23-per-cent discount on the best available rate. Drop below the magic number, however, and with it the discount drops too.
Picking up the pieces
It’s been a tough couple of years as the effect hits from some of the world’s biggest hotel brands getting involved in mergers and acquisitions. It began with the Marriott- Starwood mega merger throwing the hotel industry into disarray, leaving some other players unable to compete.
Figuring out how to grow
“All hotel companies needed to figure out a way to grow,” says Jaclynn Reinhard, consultant at CWT Solutions Group. Some hotels – Hilton, Wyndham, Hyatt – decided to grow organically, continuing to build their own brand and create more hotels. Others, such as IHG and Accor, took the mergers-acquisitions route. In the past year, both have been relentlessly buying smaller brands in markets where they previously didn’t have a footprint.
Effect on business travel
At a business travel level, the impact is starting to be seen as a lessening of competitiveness within certain markets. One account manager might now be overseeing contracts for ten competing hotels within the same group and is aware of what bids are coming in and advising hotels accordingly. As a result, this past year has seen CWT carefully considering diversity when it is sourcing hotels for clients to ensure that not all properties in
a city belong to the same group. The challenge going forward is to maintain diversity in programmes.
Power to change hotel politics
Another shift is the power that mega hotels now wield to change their policies. For example, after decades of cancellations being allowed up until 6pm on day of arrival, Marriott changed its policy to 24–48 hours’ notice. Other hotels followed suit and it’s now industry standard.
This article was written by Karen Bamford and was originally published in the Spring issue of Connect. It has been shortened for digital distribution.
