As Hotel Rates Recover, Amenities Might Lag

Could Tech Mitigate?

Even before the pandemic, hotels were emphasizing technology, particularly apps. Touchless technology “was happening before the pandemic. Now, if you can do a contactless check-in right down to the room key, I think people will take a digital form anyway they can,” said Amex GBT’s Reimer. 

At the height of the pandemic, many felt the less contact the better, he said, and some have become accustomed to that approach. “People don’t necessarily want to talk to people,” Reimer added, “so if you can move faster and get done what you need to do without making a phone call, without having any interaction, a lot more people will choose digital first.”

Mouw added that apps can do more than check travelers in and out, citing keyless door entry and housekeeping and service requests. 

Even so, digital strategies and guest expectations depend on the market, noted Torrance. Especially in the upscale and luxury hotel tiers, digitizing the experience may go against the brand mission and the guest expectation. “In the first year, people were so ready for [apps]; they didn’t want to talk to anybody. People now are striving for that human contact and to actually see a smile.”

What About Amenities?

In BTN’s fall Hotel Survey, buyers voiced concerns about reduced sales staff and their hotel partners’ ability to negotiate new contracts, or renegotiate or mitigate existing preferred partnerships based on the realities on the ground. 

“Where we haven’t had that steady level of demand, maybe we don’t have all the sales staffing back,” said Mouw. “But at least for the U.S., the sales staff is pretty much back. We’ve had to make sure we can respond to leads.”

Smaller or independent properties, on the other hand, “work with diminished sales teams, and sometimes with no sales teams at all,” said HRS SVP global supplier relations Lukasz Dabrowski. “We work with plenty of independent hotels that do not have commercial workforces, and they’re making a tremendous effort to live up to expectations.”

Whether a big brand or an independent, not getting what you negotiated is a situation that doesn’t sit well with ConferenceDirect VP and team director and strategic meetings consultant Deborah Borak. 

“Sometimes restaurants or club lounges aren’t open,” said Borak. “What does that mean if you have breakfast or club access included in your rate—are you just out of luck, or can you negotiate room service delivery or another option?”

That uncertainty was one reason a travel buyer for a major energy company chose to renegotiate the company’s entire hotel program for 2021—despite industry advice to roll over rates for the pandemic year. The buyer said the company took a very different approach to the request for proposals, targeting market rates with the help of Yapta (now Coupa) and Tripbam data and making some allowances for strong leisure markets. The buyer presented those requests in each market to half as many hotels than were in the program before and included a mix of last-room available and regular rates. The approach alleviated potential resource strain for the targeted partners and sought to push total volume to fewer hotels. 

The company achieved a 20 percent reduction in overall hotel rates in 2021 compared to 2020. After the first year with the new program, the buyer leaned into strong partnerships to roll over those 2021 rates to 2022. 

“It wasn’t like flipping a switch,” said the buyer. “There was a lot of engagement and discussion and understanding what would make it easier for my partners. I’m super-fair, and I’m very transparent. That goes a long way.” 

That’s the kind of process many buyers may be relying on in 2022: leaning into strong partnerships for the best win-win opportunities. In companies where business travel is rebounding—and there are many of them—suppliers are eager to respond. 

And while achieving full pre-pandemic normalcy will be a challenge that hotels continue to face in 2022, said Torrance, “Even if we can’t provide what was contracted three years ago … I think we can always find solutions.”