Corporate cost-cutting causing hotels to turn to leisure business

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Leisure guests will become increasingly important for hotels in the post-recession years, according to a World Travel Market sponsored think tank meeting, held in London last week.

The WTM’s Meridian Club hotels think tank invited a dozen hotel suppliers and operators to take part in a wide-ranging discussion at the Emirates Stadium.

A recurring observation was that hotels were looking more closely at their leisure business in response to sea changes in the corporate travel environment.

Travel budgets for blue-chips and SMEs were slashed during the global slowdown, the meeting heard, and the concern for hoteliers is that even if the world economy picks up, budgets will remain tight.

Although the discussion was held under Chatham House rules, one luxury hotelier said that many companies were now mandating that their travellers could not stay in five-star hotels, while a global tour operator said that his business was now using video conferencing as a matter of course and that this had now become “learned behaviour”.

A mid-market operator said that some of its properties in France were no longer taking bookings from the MICE sector because of the strong demand from US-based leisure travellers, while another said it was benefitting from business travellers downgrading.

With recognition that responsibility for travel budgets was increasingly the responsibility of the procurement department, tougher negotiations were resulting.

“Corporations now want Wi-Fi access as part of the deal, and they are looking for free transfers, free phone calls and discounts on food and beverage which clearly affects our margins,” said one hotelier, adding: “It is possible that leisure travellers might now be more profitable than corporate guests.”

“The idea behind the think tanks is to give senior executives the chance to talk openly with one another about their sector,” said Meridian Club Marketing Manager, Mark Jacobsen. “We will take on board what was said and use it to make sure Word Travel Market, the premier global event for the travel industry, is able to service the needs of all players in the challenging and dynamic hotel sector.”

6 Sept 10

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