With the annual round of negotiations between hotels and corporates coming up fast, Grant Appleton, director of accommodation services for Zibrant, questions whether, in a volatile market, either side knows the best way forward
Bedrooms...where do we start? The world has changed dramatically over the last year. Rates negotiated by clients fewer than 12 months ago are not worth the paper they are written on and certainly not worth the time and effort of the army of people involved in this process at all stages, from the agent, the corporate and the hotels themselves.
The negotiation process had been painful, long and complicated and when the rates dropped dramatically, corporate travel managers realised all their efforts had been for nothing and were forced into justifying their positions, some even saying that they would rather be paying a premium because at least it meant that they knew what they would be paying over the course of the year.
Does this make any sense in today's market? The traveller and the users saw what was happening and moved quickly to take advantage of the situation, moving away from legacy agreements with long standing intermediaries and booking rates direct or through internet based hotel booking agents making significant savings for their companies in the process.
Now it is rapidly approaching crunch time again and judgement has to be made on whether to do it all again or just leave it to a newly open marketplace to determine your costs and your savings. You can see the corporate thinking...rates are low right now, so let us tie the hotels into agreeing one year, two year deals so we can take advantage of the market. I know of a number of corporates using this approach, speculating that the market is at the bottom right now and this is a good time to agree such things.
Have we not learned anything in the last 12 months? Chaos reigns. No one knows what to do. Lots of questions and no one knows where to look for answers. Hotels are distributing their inventory everywhere and rate parity agreements are being compromised left, right and centre. In this brave new world, who and where are the experts that can help you navigate your way through this mess? It will also be interesting to watch hotels try to justify significant increases to the client rates when the good times return. Cue more conflict.
I believe that we need to start trading in a new commodity - advice. It is not something I believe we as an industry have done very well before now, having tended to be very reactive. The number of times I have met with clients who have said it...'my TMC does not come up with new ideas or suggest an alternative way of doing things'. It is no longer only the preserve of the consultant to determine strategy and no longer acceptable for the agent just to sit back and transact bookings. The successful agents of tomorrow are those who are prepared to guide, advise and share their expertise. The knowledge of the individuals you deal with is more important today than ever before. There should be no agenda for the TMC or HBA beyond finding the best solution for an individual corporate travel predicament. It is only when this balance and dynamic are achieved that we can evolve and succeed.