Corporate-negotiated rates have always been a mainstay of hotels that cater to business travelers. But with the unforseen pandemic of the past two years wreaking havoc on business travel, hotel sales and marketing gurus have had to become more accommodating and creative with their corporate clients.
"Early on, there was very little business travel and we consolidated our transient global sales and our property sellers that were dedicated to this segment," said Dan Surette, chief sales officer at Omni Hotels & Resorts. "We kept a handful of seasoned sellers that could support the hotels and the customers as we headed into the next [request for proposal] season; we have slowly grown that team as business travel has started to return."
The brand also offered more leisure rates to its clients for their associates to take advantage of “bleisure” opportunities with work remote options remaining, he said. The company tried to be flexible and create options to help companies' travel programs.
"Our stance was that we wanted to reestablish as many relationships and agreements that we could, knowing that some markets would come back slower than others," Surette pointed out. "We also took the opposite approach, where we extended more rate flexibility, as well as individual traveler status with our Select Guest program for an additional year."
Radisson Hotel Group Americas offers its corporate clients a fast track to status and bonus point plans with the Radisson Rewards Americas members-only loyalty program, said Ross Hosking, vice president, sales and distribution. This means that after one stay, employees of its corporate clients can be upgraded to silver status in the program. This allows them to receive additional benefits.
"This is especially important, as pre-COVID road warriors head back to the road and sky and are looking to be quickly rewarded as they return to our hotels as our best customers," he said.
Additionally, Radisson is offering chain-wide discounts for corporate clients, as well as ongoing price protection for corporate clients. This effort began during the pandemic, Hosking said, when hotel room rates started to fluctuate significantly. If a hotel room price fluctuates under the negotiated rate, then dynamic pricing kicks in to offer price protection that ensures the client receives the best possible price.
"Hotels are offering better deals and perks to the corporate accounts that are still strong, and are relying heavily on their relationships with corporate travel managers to attract these travelers," said Rob DelliBovi, founder and chief executive officer of RDB Hospitality.
Hotels also have implemented "work from hotel" programs, which are amenities and packages to offer travelers an opportunity to travel while they work.
"Hotel companies will be forced to offer more of exactly what corporate clients are looking for — great rates, free breakfast, upgrades, loose contracting terms and last room corporate rate availability," DelliBovi said. "Corporations have always sent long lists of expectations needed in a hotel for their account. Hotels now simply accept more of those demands."
Travel managers want a lot from hotels these days, as their employees return to the road.
"Travel managers' expectations are high, and they have the power to be choosy," said Allison Handy, senior vice president, commercial at Prism Hotels & Resorts. "Thankfully, we aren’t seeing as much of a rate war as I feared, as hotels realize the costs they are facing and are selling on merit and value."
Prism's sales teams have to be precise and thorough, do their homework and know what the buyer is looking for and what is going to position their hotel as the most desirable, she said. While travel managers are "in the driver’s seat" on hotel selections within their programs, properties are making much more data-driven decisions on rate negotiations. Now that they are studying pricing more closely as their travelers are hitting the road, travel managers are pushing some hotels to pull back on rate.
In addition, hotels are being more accommodating to corporate client requests to offer modified cancellation policies, Handy said. But as hotels get busier, they won’t be able to wait until the last minute and the fear of cancellation will have to be weighed with availability.
"We have had some success with signing some corporate groups on a first right of refusal term. We will book the program on a contingency basis, but if we have an opportunity for another program over their dates, the client will either have to confirm the booking with a guarantee or release the space to the new group," she said.
At Concord Hospitality's properties, most corporate accounts across the country received “roll-over” negotiated rates over the past two years. This meant that the hotels honored the 2020 negotiated rate and rolled that price over in 2021 and 2022, said Kevin McAteer, senior vice president of sales and marketing.
"Not only have corporations saved a great deal of expenses due to the limitation on travel, they also have not had a price increase in over two years. We are preparing to take an aggressive pricing position and look to recoup the lack of price increase over the last two years," he said.
He added: "I believe it would be accurate that hotels are less willing to make the menu of concessions we once considered pre-pandemic, although there have been some positive concessions put in place that will benefit corporate travelers as they return to the road."
For instance, long gone are the days of 48-hour or 24-hour reservation cancellation. Now, many corporate accounts are often receiving the opportunity to cancel reservations up to 4 p.m. on the day of arrival without penalty.