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Hotels float rate change: chains attempt to expand dynamic pricing to corporate travel.

Article Excerpt
Firmly in the driver's seat this negotiating season, hoteliers are offering new pricing approaches that move buyers away from fixed annual or seasonal prices in favor of dynamic corporate rates.

Some buyers are wary about any seismic shift in pricing models and shared concerns that dynamic corporate hotel rates would make budgeting more difficult and lead to higher overall expenses.

Regardless of pricing structure, buyers are heading into the toughest hotel negotiating season in years, in a climate created by a strong rebound in business travel and overall occupancy and limited hotel supply growth.

Hilton, Hyatt and Starwood said they were among those working with corporate clients to implement new rate models during the fall negotiating season, claiming flat negotiated rates have become outmoded, as they do not reflect price fluctuations that occur throughout the year.

Hoteliers are exploring bringing the dynamic pricing concept, which travel management companies last year began using to replace fixed consortia rates, to larger corporate accounts. Last year's efforts included decisions by Hilton Hotels Corp. and InterContinental Hotels Group to eliminate fixed consortia rates available through travel management companies (BTN, Oct. 18, 2004) and Marriott International's and American Express' change from fixed...