The latest hotel bidding season was better to buyers than in recent years, as Business Travel News recently reported. The industry news outlet quoted Advito’s Marwan Batrouni in a wide-ranging story that described softer-than-expected rate increases and the emergence of several accommodation trends.
Negotiating power shifted
Buyers saved more as the request for proposals (RFP) season progressed amid economic and political uncertainty. Advito found that at North American hotels, for example, the initial average offer was 2.4% higher than the existing contract. But the final increase was just 1.3% higher. Similar results played out across all other global regions, said Batrouni, senior director and practice area leader for Advito, the consulting arm of BCD Travel.
Dynamic pricing gained transparency
Batrouni said Advito and BCD took steps to make dynamic pricing more attractive and transparent. The business travel consultancy collects and tracks market information, auditing thousands of properties every month to determine best available rates (BARs). “Dynamic rates have always been somewhat of a mystery,” Batrouni told BTN. “If a program is going to be offered 15% off of BAR, what does that really mean? Now we have access to a full year worth of data where we are capturing best available rates, and we can immediately go back and apply that 15% discount to what we captured to be able to inform clients what it means.”
Buyers pushed for a fast-tracked RFP season
Companies want to spend less time on hotel RFPs. Advito’s new “fast-track” method uses market data and a client’s existing negotiated rates to calculate the rate the client wants to pay to key properties in its most important markets. Properties that accept those rates are fast-tracked and prioritized when final decisions are made. “We are going through a fairly robust analysis up front and coming up with the right, realistic rates that we go in and request before the RFP process even begins,” Batrouni said.
The Marriott-Starwood merger loomed large
The merger of Marriott International and Starwood Hotels & Resorts had little impact on the 2017 hotel RFP season, Batrouni told BTN. Nevertheless, “the Marriott-Starwood consolidation is on everyone’s mind,” he said. “Everyone is trying to anticipate how things are going to come together next year.”
