HRS Sees North American Corporate Travel Managers Leveraging Data and Rate Trends to Drive 2017 Hotel Savings
NEW YORK – October 27, 2016 – HRS, the world’s largest corporate hotel content provider, sees emboldened travel buyers in North America securing hotel savings for next year as the 2017 corporate hotel RFP season progresses.
With the hotel industry reporting flattening rate and occupancy figures for the third quarter, and more industry outlets projecting softer demand scenarios for next year, corporate hotel programs are taking advantage of the environment as they negotiate their 2017 agreements.
“Travel managers who absorbed high single-digit increases in most markets in recent years are seeing much less aggressive rate requests from the larger chains,” said Jeff Hillenmayer, head of corporate hotel sourcing for HRS Americas. “What’s more, as our travel buyer customers bring better data on their company’s travel trends and are able to steer travelers to preferred properties, hotel representatives have been quicker to propose deals that secure volume for 2017.”
HRS, which serves more than 3,000 multi-national corporate hotel programs worldwide, first began managing hotel RFPs for North America-based companies in 2014, then followed with a team on the ground beginning in 2015. This year, HRS Americas has tripled the number of corporations for which it is managing RFP season, including programs in the energy, manufacturing, pharmaceutical and software industries. HRS Americas’ clients cumulatively spend $800 million annually on lodging.
“HRS has truly helped us enhance our hotel strategy as we embark on the 2017 RFP season,” said Liveth Ramos, travel manager at Silicon Valley-based Seagate Technology. “We’ve combined our booked data along with internal forecasts to arrive at a more refined set of hotels to engage with…and we anticipate securing compelling rates when our negotiations are complete.”
Initial Trends HRS Sees for the 2017 Hotel RFP Season
Hillenmayer also noted other trends from the first few weeks of the 2017 RFP season:
- Hotel chains are increasingly more willing to wrap in ancillary items (free breakfast, parking, etc.) and even meetings-related elements (rooms, A/V) for corporations that can commit to specific room night thresholds.
- In the U.S., with chain consolidation giving some brands more pricing power in select cities, more travel buyers are adding business-grade independent hotels into the mix.
- Some larger U.S.-based chains with multiple brands in specific markets appear to have a strategy that keeps rate proposals for 2017 flat at some brands, even as they propose large increases at other brands in the portfolio. The obvious goal: trying to shift market share.
- Luxury-segment brands are initially asking for sizable rate increases, even in markets where rate trends appear to be flat and even negative for other segments.
- Initial rate proposals for Silicon Valley-area hotels are significantly lower than last year.
- More travel buyers are asking for fixed-rate proposals from hoteliers, signaling an initial wariness of the floating discounts hoteliers have secured in recent years.
- For non-U.S. destinations, independent hotels remain a critical element for a well-managed global hotel program.
“At this juncture, independent properties with great locations in key business centers are more aggressive with their rate offerings as they seek to win more corporate volume,” said Hillenmayer.
HRS’ unique fee-free hotel sourcing model leverages an unmatched global team of hotel sourcing experts with decades of hotel relationships in major business destinations. Working with its growing worldwide corporate client base, HRS has commenced negotiating rates on more than 12 million room nights for the 2017 RFP season, more than doubling that figure from only two years ago.
“This RFP season clearly presents opportunities for corporate hotel programs seeking to rein in room rate increases for 2017,” said Suzanne Neufang, vice president of HRS Americas. “Travel managers should keep consolidating their data, pay close attention to third quarter performance reports from hoteliers in the weeks ahead, and bake in those results as they engage their hotel partners in the weeks ahead.”
ABOUT HRS Americas
HRS grew its staff by 15 percent in 2015, and today employs 1,600 employees in 26 offices around the world, with Australia and Mumbai being the latest office additions. HRS features 300,000 hotels in the global portfolio, including 180,000 independent hotels with no affiliation to a chain. With five million rooms in the global distribution systems (GDS) HRS is the largest hotel content provider in these systems. Numerous global companies in the Fortune 500 are among HRS’ corporate clients – including Alibaba, Bridgestone, China Mobile, Hitachi, Panasonic and Roche.
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BrophyPR for HRS Americas