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Intercontinental Hotels Group’s Europe chief executive has predicted that hotel chains are likely to be “bullish” on room rates during the current RFP season.
IHG’s Angela Brav said that hotel companies would be looking for a “fair price” during the current round of negotiations with corporates.
“We have to be able to charge a fair price for that brand and location,” Brav told BBT. “Hotels are going to be bullish about price. The cost of everything has been going up – the cost of employees, energy and taxes have all increased.
“If they want hotels to offer a great experience then we have to be able to charge a fair price. Hotels have already cut costs to the bone and cannot cut any further otherwise guests will not get the experience we want to give them.
“We have no intention of price gouging but we have to charge what is a fair price.”
Brav added that buyers and their travellers should not be “driven by price” when booking hotel brands.
“A travel manager knows without a shadow of a doubt that when they sell an IHG brand their customer is going to be taken care of,” she added. “What travel managers want more than anything is to know that their customer is going to be happy.”
Brav compared its top-end brands such as Intercontinental to other luxury products outside travel.
“When you go and buy an Armani suit you don’t question that price – it offers a certain brand and experience,” she said.
“If you are an Intercontinental guest then that brand means something to you.
“Prices do go up – luxury brands’ prices are going up because they have the same rising costs.”
Brav added that free wifi and breakfast were unlikely to be classed as “added value” for much longer because they were becoming expected elements of a hotel stay, especially for business travellers.
Matt Luscombe, IHG’s chief commercial officer Europe, added: “Travel managers have a very sophisticated view of the value that their travellers get.
“For example, Holiday Inn Express offers free breakfast and wifi which is an immediate £11 saving versus Premier Inn.”