The emerging outlook for 2015 corporate contract room rates in the United States is expected to increase the most since NYU started preparing this forecast with a national average increase of 5.5% to 6.5%, according to a report released Monday by Bjorn Hanson, Ph.D., clinical professor, Preston Robert Tisch Center for Hospitality and Tourism at the NYU School of Professional Studies.
Corporate and contract rates represent almost 20% of occupied U.S. room nights and almost 30% of U.S. lodging industry revenue.
For 2014, average negotiated rates (ADR) increased approximately 4.5%, compared with the overall ADR increase for U.S. hotels of about 4%.
The study states that a trend that accelerated in 2012 and 2013 was to charge separately for some services and amenities instead of including these charges in negotiated room rates. In 2010 and 2011, there had been a trend for corporate and contract rates to include services and amenities including internet access, fax charges, use of fitness centers, and breakfasts; that practice is generally being reversed.
Another trend that is continuing is for buyers to reallocate the portfolio of contract rate hotels to include more upscale, select-service and limited-service hotels in place of upper-upscale hotels and full-service hotels.
Some corporate travel departments allow travelers to select hotels that are not included in the portfolio of hotels with negotiated rates. This can be especially popular among younger travelers and can have the effect of lowering the overall average rate while increasing travel experience satisfaction.
These estimates are based on selected interviews with industry executives and corporate travel executives, analysis of industry financial data, press releases, and information available on hotel and brand websites.