your opinion

What do you believe will be the biggest trend in corporate event planning over the next year?
 
What do you believe will be the biggest trend in corporate event planning over the next year?
Virtual and hybrid events
58%
Increased focus on sustainability
10%
Advanced event technology (e.g., AI, VR)
0%
Personalized attendee experiences
19%
Health and safety measures
3%
Other
10%
 
 

latest issue

Latest Issue

Dynamic Pricing

Helping corporate buyers keep hotel costs in line with market conditions.

At a time when there may be nowhere “down” to go in negotiating corporate hotel rates, a once-dismissed buzzword has been quietly making the rounds: dynamic pricing.

Major hoteliers pitched dynamic pricing models to corporate travel managers in a big way five years ago-in the midst of a boom and a solid sellers’ market. Fixed-pricing for corporate hotel rates was passé, some then said, touting yield-management techniques similar to airlines with variable, floating rates.

Back then, the idea landed with a thud, as travel management resisted open-ended contracts and rates headed skywards.

The scene looks oh-so-different in a buyer’s market. Many people have seen retail prices for hotel rooms fall steadily lower than contracted rates. Not only does this entice travellers to book outside the travel program, companies can lose tracking data on those “buy-around” room nights, wrecking purchasing power.

Pricing strategy evolves
Given the new realities, one buyer who welcomed the introduction of dynamic hotel pricing options in her travel management toolkit last year is Yvonne Kerns, who oversees the global travel category in corporate services of one of Canada’s Big Five banks in Toronto. An active member of the Association of Corporate Travel Executives, earning its Ambassador Award in 2009, Kerns has honed her knowledge as a corporate buyer managing a complex program that spends about $10 million a year with some 200 hotels.

“We still negotiate flat rates for [hotels in] all our major cities, which sets the ceiling. But we can now layer dynamic pricing on top of that,” she says, which means she always gets a discount off a benchmark, such as her travel management company’s consortia rate, with data tracked back to her program.

Her strategy is to set fixed, or capped, rates in preferred properties, and look for chain-wide agreements for uncapped dynamic pricing in lower-volume markets.

Sellers adapt to conditions
To a buyer, a floating rate makes sense when things are headed south. But, nobody is quite as willing to toss out negotiated rates that hedge against future price increases.

“Clients still always prefer the fixed pricing, mainly due to the way they budget,” says Andrea Stavroulakis, executive director, global sales, business travel, with Fairmont Raffles Hotels International. At the same time, she says, it’s been important this year for hotels to address corporate concerns about price integrity.

In fall 2009, the Fairmont brands began extending global customers a negotiated discount off the best available rate at non-preferred hotels, in its version of dynamic pricing. For preferred hotels, a dynamic element can ensure the best available, unrestricted rate is automatically matched, retaining all the negotiated value-added.

“A few [buyers] have asked for it, and in other cases we have just presented it. It’s not a standard question in the RFPs, but I think there’s great value to be had there,” says Stavroulakis.

Similarly, Starwood Hotels & Resorts is also extending dynamic pricing options.

“I don’t have any floating rate structures in place, it’s all negotiated rates, but we do have a chain-wide discount on non-preferred hotels on a floating rate,” says Catherine McAuley, associate director, Global Sales, Starwood Hotels & Resorts Worldwide Inc. Upgrades in the reservation system now make it possible to automatically swap a corporate rate with a lower available rate that meets the same conditions.

“It’s been an interesting couple of years, for sure,” says McAuley. “The Canadian market has gotten so tight on rates, we have all really had to work to the strength of our relationships.”

by Julie Charles

other articles in this section

The Waiting Game

Q&A with Suzanne Neufang, Executive Director, GBTA

By the Numbers

Keeping Corporate Data Safe

Are Your Female Business Travellers Safe on the Road?

Flight Turbulence

What’s your Data Plan?

Get it in Writing

Follow the money

In Harm’s Way

It’s all in the timing

Covering Trouble in Paradise

Flight Plan

For Safe Keeping

Smooth Moves

On the Safe Side

At Your Bleisure

Cover me!

Uber. Airbnb. Lyft…

Q&A with Anthony Pollard

Data Dilemma

Getting on track

So Long, Swipecards

Take your Best Shot

Benefits of Integrating Mobile Payment Platforms

Trend Setter, Dorothy Dowling

Newest Cloud Technology

Is it Time to Dust Off your Corporate Travel Policy?

The Future Travel Credit Management Solution

Planes, trains and data plans

When employees fall ill on the road

Burnout Busters

The Rules of Compliance

Communal Spaces Boost Hotels' Comfort Factor

Making the most of travel and expense management systems

May the Best Vendor Win

Evaluating disaster recovery plans

On the Road Again

Hotels Taking Wellness to a Whole New Level

Corporate Travel Tracker

Controlling Corporate Travel Costs

The Anti-stress List

The Blurred Line Between Corporate Travel Manager and Planner

Big Flight Discounts for Small Businesses

Are Business Travellers Putting Corporate Data at Risk?

Timesaving Mobile App for Superior Car Service

Company Car or Driver-owned?

10 Healthy Travel Tips

Navigating Emerging Markets

Business Travel Etiquette

Rogue Travellers on Spending Sprees!

Business Travel and Health

Social Media and Travel Programs

Baggage Handler Confidential

Travel Expense Reporting

Buses Mean Business

Travel Budgets Analyzed

Q+A with Ron DiLeo

Progressive Extended-Stay Programs

Dynamic Hotel Pricing

The Perfect Travel Management Company

The Kindest Cuts

Green Businesses

Travel Policy Compliance

Car Sharing: The leaner, greener choice!

Expense Accountability

Hotel Program Success

Costly Corporate Credit Card Programs

Travel Less, Save More?

Dynamic Pricing

Travel Program Success

Meetings Abroad: Are you Prepared?

Maneuvering Through the RFP Process

Cross-Border Air Travel

Time for a Travel Policy

10 Ways to Avoid Business Travel Pitfalls

Bargaining Table Car Rental Tips for Corporate Planners

Creating Travel Policy Compliance

Sustainable Travel Tips

Crucial Travel Policy Changes to Save Time and Money

Tipping Guide for Business Travellers

Corporate Travel Policy

Passport Essentials and Other Requirements

Managing your Company's Travel Risks

Duty of care to travellers goes beyond borders