Traveling on business next year? Expect to pay up to 6 percent more for your hotel rooms, according to travel expense management experts. With a stronger economy and higher occupancy rates, hotels aren’t as eager to haggle, reports a new study by the Tisch Center for Hospitality at New York University.
According to an article in USA Today, fall is the season when U.S. hotel chains negotiate their corporate rates for the coming year. As hotel prices increase, who picks up the slack — and how? Here are a few ways the rising prices could affect an organization’s business travelers and travel expense management strategies.
- Cutting back on luxury. Organizations will likely look for more affordable lodging options, opting for select- and limited-service hotels, the NYU study suggests. These options may provide a good match for the needs of business travelers.
- Focusing on price over amenities. Customary perks like free Wi-Fi and fitness facilities may become a la carte services as a way to keep negotiated room rates lower. This could mean travelers would need to get these additional fees approved (or pay out of pocket).
- Shifting loyalties. Just like airlines and car rental agencies, hotels have to build relationships not just with corporate buyers, but also with individuals. As rates rise, USA Today suggests employees may have more choice in lodging, leading to loyalties based on individual preferences rather than corporate policy.
- Higher expectations for business travel. While these higher prices on hotels might not significantly reduce the frequency of business travel, they could mean that companies expect greater efficiency and productivity from employees on the road.
In the broader view, rising hotel prices for 2014 would seem to indicate a healthy, growing economy — a positive prospect for many organizations and industries. But these higher prices will mean changes for individual business travelers and travel expense management strategies.
We’d like to hear your thoughts. What advice would you give organizations as they adjust to higher hotel rates and other travel expenses? Share your advice by posting in the comments section!
Source: USA Today, September 2013
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