COVID-19: Should hotel rates freeze? | Consumers hungry for travel

GBTA’s controversial hotel rate freeze advice

The Global Business Travel Association is endorsing a postponement of the 2020 hotel request-for-proposals process until 2021 due to the coronavirus pandemic, and “encourages hotels to roll all 2020 rates for 2021.” The response in the business travel industry has been mixed, especially because, according to several experts, rolling hotel rates over could erode the value of the corporate travel program.

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Consumers hungry for travel in next three months

A recent survey reveals encouraging signs of an uptick in overall consumer sentiment. The third COVID-19 U.S. sentiment and purchasing intent survey, from international research company BVA BDRC, indicates that more U.S. consumers are anticipating resuming their general leisure activities within the next three months. More Americans also expect to travel in the next three months: 26% intend to book a U.S vacation and 23% an international vacation. Potential travelers expect hoteliers and homestay owners to make sanitizing hand gel available and implement new cleaning standards before their next stay. Some 27% of past homestay (Airbnb, VRBO) guests say they will not stay in such accommodation again until a vaccine or cure is found. This attitude compares with only one in 10 hotel guests.

Read the full survey

Marriott gets advances on credit card deals

Marriott International signed amendments to existing co-brand credit card agreements with JPMorgan Chase & Co. and American Express that will provide the company with US$920 million in cash. Of the total, US$570 million comes from Chase and US$350 million is from AmEx. The Chase money prepayment of certain future revenues and early payment of a previously committed signing bonus under the co-brand credit card agreement. The AmEx funds include the pre-purchase of loyalty program points.

Read more at Marriott’s website

Corporate travel programs will seek lower hotel rates

A recent survey of corporate travel program managers and procurement executives shows that a majority of those surveyed see opportunities for rate savings in 2020 and beyond, with 58% planning to consolidate hotel suppliers, according to data from the survey, conducted by hotel solutions provider HRS. Other key findings:

  • 62% of respondents foresee opportunities to reduce hotel room rates and gain more flexible terms and conditions for the balance of 2020 and beyond
  • 51% said they anticipate issuing RFPs to achieve that goal
  • In exchange for hotel supplier flexibility as business travelers get back on the road, a vast majority of corporations are willing to commit to 15- to 18-month-long agreements, with 81% of responding travel program leaders willing to negotiate contracts for the balance of 2020 and the full 2021 calendar year
  • 58% anticipate reducing the number of suppliers they work with, offering preferred hotel partners the opportunity to win more share from existing corporate clients
  • 86% will prioritize hotel partners with revised, specific COVID-19 hygiene protocols

Hilton extends meal program for front-line workers

Hilton and American Express are extending the offer to provide complimentary meals to front-line health care professionals staying at participating Hilton properties in cities across the U.S.  during the coronavirus pandemic. The pilot program feeds professionals staying free in rooms donated by Hilton and American Express and enables some furloughed restaurant staff to return to work in Los Angeles, New York City and Washington, D.C.

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Playa selling two Jamaican Jewels: Fairfax, Virginia-based Playa Hotels & Resorts has entered into a binding agreement with a third party to sell the Jewel Dunn’s River Beach Resort & Spa and the Jewel Runaway Bay Beach Resort & Waterpark, both Jamaican properties, for US$60 million in cash. Playa expects the transaction to close in the second quarter of 2020 and will provide an update on its liquidity position on its upcoming Q1 2020 earnings conference call.

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Hotel Equities managing in North Carolina: Atlanta-based hotel owner and operator Hotel Equities was appointed as management firm for the boutique Hotel Indigo in Winston-Salem, North Carolina. The IHG hotel is owned by Mayfair Street Partners, which tapped Hotel Equities to take over the day-to-day operations and management for the full-service hotel.