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Mapping the future of your hotel program

September 14, 2022


By Belinda Hindmarsh
Chief Growth Officer

Optimizing the hotel booking experience for travelers is at the heart of what we do at RoomIt and we are seeing how the rapid rebound of travel is impacting supply and demand dynamics and what that means for our clients and their hotel programs.

A global hotel platform, trusted by 20 million business travelers to book 30 million room nights each year, RoomIt resides within the CWT ecosystem to incubate, curate and advance global hotel programs for businesses and their travelers, providing the tools and insights to manage our clients’ hotel programs and provide best-in-class content, while delivering savings, and ensuring the safety and security of travelers.

We’re supporting some of the largest hotel travel programs on the planet and we’re seeing patterns change rapidly from an increase in shorter length of stays to short booking windows lengthening and levelling out to pre-pandemic levels. 

Changes to booking behavior and the macro-economic situation resulting from global inflation, the Russia/Ukraine conflict, and labor shortages creating uncertainty makes hotel sourcing a headache for many travel managers right now.  

Average daily rates (ADRs) have been growing at pace driven, in part, by an increase in bookings for slightly higher caliber hotels than pre-pandemic. In looking at a sample of customers on the platform, there is a slight shift from 2* to 3* hotels, and from 3* to 4* hotels.

Our 2023 CWT GBTA Global Business Travel Forecast predicts that hotel rates will rise 18.5% in 2022 followed by an 8.2% lift in 2023. Hotel prices have already eclipsed 2019 levels in some areas such as Europe, the Middle East & Africa and North America and are expected to do so globally by 2023.

Sharpening your strategy

With travel patterns changing, there are a myriad of variables to consider. We recognize that when it comes to building a hotel program, each customer has unique needs and objectives to consider. There’s the purpose of the trip, destination, price, and traveler profile plus many other variables that can play a role in determining the right hotel and level of support needed.  Although each hotel program is unique, working with a team of hotel experts can provide travel buyers with key insights such as booking trends and recommendations on finding the sweet spot between the number of properties selected offering travelers choice, but also ensuring every hotel in program is part of a strategic plan.

As we look ahead and with pandemic-related barriers coming down in many parts of the world, our RoomIt roadmap remains focused on simplifying travel programs and providing peace of mind to travel managers and travelers alike, by solving for every element of hotel management.  

Our RoomIt platform allows us to bring together the various components of a hotel program at scale and tailored to meet the unique needs of each customer.  We collaborate with hotel suppliers and clients to fine-tune and future-proof every aspect of a travel program.  From sourcing through optimization, RoomIt provides the tools and data needed to ensure travelers have the technology, tools, and support to find the hotel that is right for them, and that they can easily book the most appropriate room and rate type.

Here are 3 ways to navigate the unknowns and build a hotel program fit for the future.

  1. Review your policy – Make sure your travel program is still fit for purpose.  Have the reasons for travel and therefore destinations changed? Is it mandatory for travelers to book within policy for safety and compliance reasons? Is there a need to review star rating recommendations for certain locations or countries due to virus concerns?  Is your travel policy aligned with your non-refundable air policy? Could changing the hotel travel policy to incorporate and encourage usage of non-refundable rates help offset rapidly growing ADRs? Travel policies need to be updated more frequently given the constantly changing travel landscape. 
  2. Prepare for sourcing season  Be selective and ensure you strike a balance between offering variety in hotel choice for travelers to keep them booking in policy and provide a great traveler experience, but also ensure you don’t dilute your negotiating power at a time when ADRs remain high.  Introduce challengers offering lower rates, changing the profile of your past hotel program with alternative properties. Reset pricing could be materially higher than the rolled over or grandfathered rates of the last two years many large accounts have seen. Inflation remains elevated and hotel pricing is likely to remain volatile in the next 6-12 months, particularly as we see in-person conferences and in-person events return, which has had a slower recovery than other travel segments. Negotiate static corporate rates, ensure you have the flexibility of leveraging your travel management company or hotel provider content where it makes sense to do so as prices fluctuate, in order to address real-time needs.
  3. Build sustainability and wellbeing into your hotel program – Although the primary area of focus for sustainability in travel tends to be air travel, now is the time to begin building sustainability into your hotel program if you have not yet done so. Providing carbon emission data at the point of sale can help travelers make informed decisions about their carbon footprint and where they stay.  Providing educational tips on how to be eco conscious whilst on trip can also help raise awareness and make an impact as can careful consideration around the purpose of the trip. Find out more in 'A green standard in hospitality', my recent podcast with Kit Brennan of carbon intelligence platform Thrust Carbon.

There is no crystal ball to foresee exactly what the needs of your hotel program will be or how the market will react in the next 12-18 months ahead. That said, by revisiting organizational objectives, reviewing your travel policy and partnering with a supportive and compatible hotel provider, there are ways to future-proof your hotel program on the bumpy path to recovery.

Find out more about how to future-proof your hotel program in the 2023 CWT GBTA Global Business Travel Forecast.


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