How Hotels Are Pushing For Dynamic Pricing

How Hotels Are Pushing For Dynamic Pricing

HotelMarketing uncover how as demand grows, hotels push for dynamic pricing with corporate clients for the year 2015 and beyond. According to an updated forecast by Advito for 2015, hotels increasingly encourage corporate clients to switch from fixed negotiated corporate rates to dynamic pricing. And some go even further by undercutting negotiated rates and offering business travellers the lower pre-paid rates normally associated with leisure stays.

Hotels know corporate clients are still nervous about authorizing too many trips and are looking to substitute travel with technology wherever it makes sense. On balance, therefore, rates are likely to grow in 2015. While some hotels will push for more, increases will be modest outside of the world’s busiest business cities (such as New York and London) where rate rises will continue to be much stronger.

Rate growth will be only 1-3% in many Asian countries, including China, where growth in demand and supply will be well-matched. The same range is expected for most of Europe, where negotiating opportunities remain strong for buyers. Even German cities that have traditionally been ultra-expensive during trade fairs are not selling out as they once did, giving buyers a chance to secure good rates year- round. The Americas will see most of the highest increases. Rates in the U.S. and Canada will rise 3-4%. In Latin America, a combination of inflation and fast-expanding business travel markets will fuel rate rises of 8-10% in Argentina and 6-8% in Brazil. However, rising travel costs are persuading more companies in Latin America to control their spend; better management should help offset some increases.

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