Buyers avoid high-cost hotel chains

6 July 2008
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07 July 2008 | Jake Kanter

Business travel buyers are turning their backs on traditional hotel chains because of high rates.

According to a survey by the Institute of Travel Management (ITM), 52 per of buyers are seeking alternative accommodation to secure lower prices. Budget hotels, independent hotels and serviced apartments for longer stays were among the alternatives favoured by purchasers.

Buyers are also trying to use additional spend, by buying facilities such as meeting rooms or video conferencing at the same time to negotiate better deals. Some were simply reducing the star rating of the hotel used to cut costs.

Some 60 per cent of the 175 buyers surveyed said prices in the UK and Europe had risen as much as 10 per cent in the last year alone.

Paul Tilstone, executive director of ITM, told supplymanagement.com high costs are an issue of supply and demand. He said because of a global economic boom there was an increased need for hotel rooms, but a lack of space to accommodate the demand, so prices increased.

Travel management company HRG said recently although demand for hotels would continue to increase in 2008, the growth would be slower because of the economic downturn (Web news, 20 February).



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