Mistakes to Avoid When Renegotiating Corporate Hotel Rates

Nobody has a crystal ball — although many travel buyers probably wish they did right now. One question on their minds will be what is the hospitality sector’s playbook for recovery exactly?

In Italy, one of the hardest hit countries so far, procurement teams are already renegotiating corporate rates with hotels. Skift talked to industry experts, including one in Florence, about what’s on the horizon once travel gets the all-clear, and what procurement teams and hotel revenue managers should try to avoid as they return to the negotiation table.

IT WON’T BE PLEASURE BEFORE BUSINESS

Hotels are being urged to realize the corporate market will probably be the customer segment that will be the first to check back in.

“Once you get the green light, business is going to return in a series of steps. First the independent business traveller, then second is some leisure travel recovery. Then group business pick-up,” said Mike Chuma, vice president, global marketing, enablement at engagement at IDeaS. “You’ll see a negotiation of those rates and contracts, a shrinking of groups, and hotels will need to offset some of that shrinking of group business with leisure. There’s going to be vast renegotiation of those contracted rates. Hotels may see a bit of change in their segment mix.”