Hotel Rate Talks To Shift With Demand Gains
it begins negotiations later this
summer, “including in many
cases significant increases.”
“While it’s a bit early to quan-
tify the increase in 2011 with
strengthening demand, our
customers know that today’s
prices are not sustainable,” So-
renson said. “They recognize
that to provide the best quality
service, availability, amenities
and facilities, hotels need to be
able to charge a fair price.”
In Starwood Hotels & Resorts’
earnings call, vice chairman and
CFO Vasant Prabhu said his
company would like to see a re-
turn to pre-recession rates over
a two- or three-year period and
would be seeking increases in
the high single digits in its ne-
gotiations. “Of course, it is case
by case in negotiations,” Prabhu
said. “It also depends on what
the rest of the industry is doing,
but that’s our intent.”
Timing for negotiations also is
CONTINUED FROM PAGE 3.
a challenge for buyers this year.
As of early August, most buyers had not begun negotiations,
said Bob Brindley, vice president of BCD Travel consulting
division Advito. Many buyers
are reluctant to be in the first
wave of negotiations, hoping
the early birds would talk down
some of the proposed increases,
he said.
Egencia vice president of supplier negotiations Noah Tratt,
however, said his clients are
eager to start negotiating in
case the hotel demand outlook
continues to improve. Likewise,
some hotels want to wait until the outlook is clearer, while
others are ready to negotiate in
case the demand improvement
reverses, he said.
“Hotels are trying to take the
temperature, but there’s a sense
that it could get worse,” Tratt
said. “There’s just as much un-
certainty as there is optimism.”
Buyers will face the tough-
est time in major markets such
as New York, Chicago and Los
Angeles, NYU’s Hanson said.
Starwood president and CEO
Frits van Paasschen said that
during June, midweek occu-
pancy levels topped 90 percent
for the company’s properties in
New York, Boston and Chicago
and reached 98 percent in Lon-
don. Smith Travel Research also
reported that New York aver-
age daily rates increased by 15. 4
percent year over year in June.
“Our customers know
that to provide the
best quality service,
availability, amenities
and facilities, hotels
need to be able to
charge a fair price.”
Europe’s recovery also has been
tepid, he said.
Buyers will face the largest
potential increases in the upper
upscale and luxury tiers. Smith
Travel Research reported that
luxury hotel rates in the United
States were up 4. 7 percent year
over year in June, the largest
increase among the tiers. Econ-
omy hotel rates, however, were
down by 3.2 percent year over
year, and midprice rates also
were down slightly.
Efforts Advancing Ancillary Fee Solution
to issue, store, manage and distribute electronic miscellaneous
documents using Amadeus
technology.
A timetable of the third quarter of 2010 long has been targeted for achieving this goal,
though there remain suggestions the date will slip. Tetaz
told Business Travel News that
Amadeus will begin piloting
EMDs with agency customers
in November, adding that much
will depend on the readiness of
each national billing and settlement plan to handle EMDs.
“BSP readiness varies on a
market-by-market basis, just as
was the case with e-ticketing,”
he said.
Sabre last month unveiled a
placeholder solution with its
Total Pricing initiative, which
the GDS said would enable
travel agents and other bookers
to see the true cost of an airline
itinerary, inclusive of any applicable add-on fees—from baggage fees to seat assignments—
before booking a flight. Moore
said Sabre is on pace to deliver
the next, and more complicated, step of enabling booking, payment, settlement and
fulfillment through the global
distribution system channel by
year-end.
“We’re rapidly moving down
the path of enabling all of the
CONTINUED FROM PAGE 46.
payment and fulfillment of all
of the ancillaries as well,” Moore
said. “ARC and all of the BSPs
around the world are moving
toward 4Q 2010 timeframes
for introduction of EMD set-
tlement. We intend to get our
EMD capabilities out there
to the agency community in
roughly the same timeline.”
Moore added, “The booking
capabilities are moving down
toward a fourth-quarter deliv-
ery as well, and that would be
across multiple ancillary types.
We absolutely expect that to
happen in the travel agency
channel beginning this year.”
As for ARC’s own schedule
in enabling electronic miscel-
laneous documents as the U.S.
bank settlement plan, Premo
said, “We’re still on schedule
for an end of third-quarter,
early fourth-quarter rollout,
but we’re really not going to
see a whole lot of these unless
the carriers make the content
available, so at the moment, the
only public conversations have
been the American-Farelogix
connection. We’ve been work-
ing closely with them, so when
American is ready to make that
available we’ll be ready to pro-
cess it, and if agents are using
Farelogix for that then we’ll be
able to close the loop.”
—Amon Cohen contributed to
this story.
