Hotels seem to be winning their battle to persuade corporates to accept "flexible" pricing according to Margaret Bowler, general manager of hotel relations at HRG UK.
In the travel management company's latest worldwide survey of the hotel industry, Ms Bowler said: “Tactical rates have all but disappeared across the industry.”
She added: "'Flexible' or 'demand based' pricing, whereby rates 'float' on a daily (or in some cases hourly) basis below agreed consortia/client rates, is now largely industry standard.
"It is likely that, over the next couple of years, some rate negotiations will centre around an agreed discount off the 'floating' rate.
"In the UK we are already trialling this with some of our corporate clients but ultimately the challenge for the industry lies in its ability to persuade clients that such a pricing model is in their best interests."
Corporates have strongly opposed the introduction of this dynamic pricing model, believing it would force them to pay on occasions higher prices than the hotel's best available rate.
Ms Bowler also said that hotels were giving great consideration to the "'profile' of the account in terms of value (i.e. the spread of room night volume over the week, length of stay and spend per stay)."
In its survey, HRG said that hotel industry was showing continued growth and a strong average performance worldwide.
Moscow was again named as the most expensive city for corporate rates which now stand at an average of £212.19, a rise of 29% on last year.
The Russian capital was one of seven European cities among the Top Ten most expensive cities for hotels in the world.
The other European cities in the list were: Paris (average rate £157), Milan (£153), London (£146), Stockholm (£142), Geneva (£142) and Rome (£141).
Mumbai with an average rate rise of 46% emerged as the city where rates are rising most quickly.
Ms Bowler said that the budget hotels had expanded aggressively with an increase in rooms available but said she expected the five-star market to go on performing strongly and to expand in key locations like London, China, Doha, Dubai, Eastern Europe and Moscow.
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