Technology

Are Corporate Rates Making a Comeback?

Travel technology supplier, Vindow, revealed in a recent blog post that they’re seeing growing interest among both buyers and hoteliers in exploring the mutual benefits of long-term or corporate rate programs.

Corporate or long-term rate agreements were once a common in the hospitality industry. Offering discounted rates for important business customers was a great way for hotels to get guaranteed revenue on the books to ease the impact of seasonal ups & downs, build loyalty and contribute to the hotel’s bottom line. Business travelers loved the consistently low rates and preferred status at their favorite hotels. However, in recent decades, a number of factors contributed to the decreasing popularity of corporate rates for all concerned; better revenue management, hotel consolidation, loyalty point program and new distribution channels like OTAs all conspired to curtail, if not kill, the practice.

Long-term contracts are still used today for niche industries, like airline and work crews, military deployments, and other situations where predictable consumption and significant guaranteed minimums warrant special consideration. Recently, it seems that suppliers may once again be considering new ways to lock in scarce business travelers and corporate rate contracts are suddenly gaining new respect. For example, duty of care concerns are leading corporate travel buyers prefer limit hotel choices to ensure their travelers’ safety.  Hotels are strategically avoiding meetings & events opportunities that may overstretch their staffing capacity. 

Against all odds, long-term contracted rates seem to be making a comeback. 

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