HOTELIERS SHOULD HOLD the balance of power during contract negotiations next year, according to one of the world's largest travel management companies.
Research conducted by American Express Business Travel (Amex BT) found that average hotel rates in the US had fallen year-on-year during the first half of 2010.
But the TMC said steadily increasing demand - especially in the group meetings sector - might give pricing power back to hotel suppliers by the first quarter of next year. Christa Degnan Manning, a director in global advisory services for Amex BT, said the fall in hotel rates would soon cease and rises would arrive in time for the 2011 negotiating season. "The travel marketplace continues to change quickly as recovery occurs, creating new challenges for both travel managers and business travellers who became accustomed to significant discounts during the recession," she said. "Airlines took many steps to position themselves for survival over the past 18 months to strengthen themselves and drive revenues and profitability. "With travellers on the road again, air suppliers have gained ground in pricing power and the end of hotel rate drops is likely to be near.
"Companies have to reconsider contracts, policies, and cost-savings tactics that may no longer be relevant."