BTN Europe presents an overview of business travel and MICE predictions for this year
Virtual Event - 25-26 May 2021
Virtual Event - 9 June 2021
Thursday 9th September, JW Marriott Grosvenor House
Alwyn Burrage, global hotel programme director at ATPI
BTN Europe speaks with Alwyn Burrage, global hotel programme director at ATPI, who shares his observations and predictions for the hotel industry’s outlook over the coming months. BTN Europe: What is demand for business travel accommodation looking like in the current environment?Alwyn Burrage: With the Covid-19 pandemic showing little sign of slowing as we head towards 2021, the hotel market is finding it tough to find green shoots of hope. Demand remains low and unpredictable but there are also some clear opportunities for both hotel operators and travel managers when it comes to planning ahead, like ensuring duty of care programmes are fit for purpose and that you have the relevant technology tools and infrastructure in place. And if you look closely, there are sections of the industry that are finding creative and innovative ways to work in the new normal too, such as airport hotels including rapid Covid-19 tests in the price of a room stay, and new work-from-hotel packages for day use of rooms and meeting facilities. BTNE: Which business sectors are most active currently?AB: In a number of markets, travel has not been massively curtailed – infrastructure projects, construction, the civil service, medical business, security personnel, oil and gas… they have all continued to travel. Hotels that serve these sectors are seeing good, steady occupancy levels that, incredibly, have actually increased in some cases. Location is critical though and, for the foreseeable future, hotels outside of city centres are going to be increasingly important to operators. BTNE: Have you witnessed any unexpected trends in accommodation use?AB: Quarantine requirements and the need for testing facilities has actually been an unexpected business channel for some hotels. In the initial stages of the pandemic, accommodating testing units or allowing team bubbles to be formed across floors of a hotel was a business that hotels were unsure how to embrace. Fast-forward six months and hotels in the right places are pivoting quickly to make it easy for clients to use them as a quarantine and virus testing location. In Australia, the likes of Melbourne’s Hilton, InterContinental and Swissôtel were quickly transformed into state-run medi-hotels for mandatory quarantine for returning travellers.BTNE: Are corporates sticking to their preferred brands or are falling rates opening new doors?AB: The industries that are still travelling for business have traditionally favoured budget hotels but, with room rates around the world on average around 25 per cent down, many corporates are allowing travellers to upgrade while remaining within their travel policy. A silver lining of sorts. There are limited signs that senior executives are travelling for business so luxury hotels are not exactly booked up, whereas mid-market chains have a lot of business coming their way, especially if they can recruit new guests into their loyalty programmes for the long-term.BTNE: What impact are loyalty programmes having currently? AB: The extras that many loyalty programmes offer – such as contactless check-in and a smartphone app which works as a room key – means that we recommend corporate travellers engage with loyalty schemes more than ever. These ‘last mile’ benefits have real tangible value when it comes to travelling as safely as possible. Travel managers also gain the reassurance that additional steps are in place to protect the wellbeing of their people. Hotel brands getting it right are seeing huge upswings in recruitment to their loyalty programme, which has benefits for them in the long-term future, not least in driving brand preference and behavioural changes. BTNE: We’ve heard a lot about extending existing negotiated rates as opposed to conducting full RFPs – what activity are you witnessing?AB: Running an RFP process takes time and resources – something that hotels do not have the luxury of anymore. With resources and budgets tight, they are keen to hang onto every possible booking and don’t want to lose time renegotiating complex programmes. The simplification of RFPs was a trend that we saw emerging pre-Covid and 2021 looks to feature deals as simple as a ceiling rate for the year with per cent discounts applied across the whole of a hotel group’s estate, including preferred properties that may have previously been excluded. The hotel market is under extreme pressure so we expect this trend to continue as they scrabble to gain as much share as they can of the available market.BTNE: Are hotels offering any value-added perks to sway corporates?AB: With occupancy down, there are opportunities for hotels to get innovative and clinch bookings. An increase in car rental for business travel, especially domestically, means hotels could offer parking in a room rate. Plus, flexible check-in and check-out times allow for travel outside of peak times and even space for corporate travellers to work from their hotel room for longer than a standard 11am check-out usually allows. While not game-changers, they are the kinds of services that are converting bookings and enhancing loyalty in a tricky climate.