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Cos. try easing rate pain: seeking preferred hotel deals to mitigate increasing meeting costs.

Article Excerpt
Such negotiating tactics as the establishment of preferred meeting hotels have been successful in keeping hotel rate increases to a minimum this year, but will not stem the tide of rising meeting costs that buyers will have to navigate in 2006 as hotel rates and all other costs are set to rise and buyers see corporate meeting discounts dwindle.

Bjorn Hanson, head of the hospitality and leisure practice at PricewaterhouseCoopers predicted that hotel group rates may rise an average of 5 percent to 7 percent in 2006, but primary cities may see even higher jumps in peak seasons. "In cities like New York next year, we may see 10 percent to 15 percent increases in spring and fall peak meeting periods," Hanson said. "That's just the rates. There will be lots for planners to look out for in food and beverage charges, meeting room charges, surcharges and fees. That will be even more aggressive in 2006 than it was in 2005."

Rate hikes have become a "self-fulfilling prophecy squared," Hanson said, as talk of increases influences the market. Hotels may try to set expectations of rate hikes high to prepare buyers for increases.

Meeting buyers can expect average hotel rates to increase anywhere from 7 percent to 11 percent, depending on the property and market, said Hyatt Hotels Corp. senior vice president of sales Ty...

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