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Article Excerpt
Chicago -- Attendees at the National Business Travel Association's International Convention & Exposition here this month publicly wrangled with the potential consequences of controversial pricing initiatives. Though it couldn't compare with the overwhelming response to the continuing spat about airline content in global distribution systems (see story, page 1), the hot-button issue of dynamic hotel pricing elicited plenty of strong public response.
One educational session featured several sharp exchanges between hoteliers and buyers, and coincided with the release of a white paper by the NBTA hotel committee designed to raise awareness of the contentious pricing model, which allows for floating, instead of fixed, corporate negotiated rates.
During the session, Denise Lodrige-Kover, Hilton Hotels Corp. vice president of business travel sales and strategic partnership accounts, asserted that decisions on dynamic pricing should not be made without first becoming educated on the subject. "There is not enough education to make assumptions," she said. Hilton's Lodrige-Kover went on to dispel some dynamic-pricing myths, specifically that hotels were interested in pursuing dynamic pricing in order to increase revenues. She said that the dynamic-pricing model often leads to suppliers and buyers breaking even, and is more a response to the arduous request-for-proposals process. Further, she denied hotels would intentionally raise best available rates to better absorb percentage discounts. "Hotels rely upon many market segments to maximize revenues," she said. "Therefore, we cannot afford to raise BAR rates to affect one market segment. The hotel industry has high integrity." The latter elicited cheers from supplier attendees. Lastly, Lodrige-Kover tried to assure buyers that analysis of dynamic pricing was achievable, and reports that show year-over-year comparison spend between static and floating rates could be generated
Mary Bastrentaz, senior director of travel and meeting services for Accenture, followed Lodrige-Kover with a report on a dynamic-pricing pilot program she implemented in conjunction with Hilton. "In five months, there was never a huge swing in rates," Bastrentaz said. "Where the nightly rate...
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