ALLOWING LUXURY HOTELS to be insinuated into travel policy sounds like a contradiction in terms. But some indulgence at good rates, and/or with added value, goes a long way towards mitigating against the rigours of travel. Then there’s the much-discussed ‘perception problem’, whereby companies worry about being seen as overly extravagant, an attitude born out of last recession, when belts needed to be seen to be tightened.
“We use the Vineyard hotel [near Newbury] for senior executives coming here from the US, which gives them the opportunity to see a higher quality of hotel but at realistic prices,” says office manager for mobile networks firm Arieso JDSU, Fiona Poole. “Once you have been there, everybody knows who you are and it feels like home. That is important for people who are travelling a lot.”
She adds: “I would rather spend £20 or £30 more per night than put people somewhere else in the Newbury area, because, at the Vineyard, I am confident I will get what I pay for.” Negotiated rates ensure the hotel also provides good value.
And luxury hotels are targeting business travellers. “They offer favourable rates to companies in order to keep occupancy levels up,” says consultant to the hotel industry, Melvin Gold. This reflects the complementary patterns of business and leisure guests, he says. “And from a corporate point of view, it is worth trying to target hotels where corporate business is not the mainstay, but is a desirable source of revenue.”
The Vineyard is a good example. “For someone booking a room for Saturday night, prices would start at around £400; but in the week, say a Thursday, it is probably nearer £150,” says Vineyard Group managing director Andrew McKenzie.
Travel buyers who use luxury hotels are keen to get good rates and added value to counter the perception problem – but the hotel needs to survive, too. “There needs to be a decent ROI [return on investment] for the hotel and they will take many things into consideration, including whether a buyer can offer something that other buyers aren’t,” says one global travel buyer. “Unpopular days of the week could be high on the agenda for hotels to fill otherwise potentially unutilised space, but volume and use of additional services, such as meeting space, is equally important.”
Business Travel Direct (BTD) is seeing a trend towards Sunday to Tuesday night business, so that instead of paying £600 for Monday to Wednesday night, corporate travellers stay on Sunday night for £80, allowing them remain within budget. “Businesses expect travellers, especially frequent travellers, to perform consistently well, and that means looking after them, investing in their well-being and ensuring that they are happy,” says head of strategic relationships for BTD, Mark Bevan. “Where cost-effective luxury hotels can be used, this can work for all parties involved.”
Shangri-La’s vice-president of sales, Greg Ward, corroborates this and says that well-being includes choosing a hotel with a location and facilities appropriate to travellers’ business needs. This is one of three key negotiating factors: “The second is providing a safe and secure environment and the third will be the price,” he says, adding that the room rate tends to be a key focus, particularly last-room availability (LRA) by room category and access to rates via companies’ nominated travel management company.
In addition, says BTD’s Bevan, “some organisations will pay a premium for having their computer network looked after by a senior engineer, and they expect them to have stayed in a higher end hotel”. Carey Duckworth, global corporate sales director at Corinthia Hotels, says: “Luxury hotels offer high levels of security and confidentiality, which are in increasing demand, and which not all venues can offer.”
Negotiating added value can be a thorny area. Free wifi is often the number-one requirement, and further potential desirables are inclusive breakfast or other meals, and car parking. “We may have a five-star or luxury property in many of our locations but the value we offer is very much in line with corporate expectations when it comes to travel programmes,” says Andrea Stavroulakis, executive director at FRHI Hotels and Resorts. “When it comes to corporate travel programmes, we are focusing on the value of the stay, location and the safety component that comes into play with certain areas – duty-of-care is still top of mind for travel buyers.”
FRHI also commits to high-rate integrity. “If we end up negotiating a rate in January or February because occupancies are lower than anticipated and the corporate rate is a bit higher, we adjust that to match best available rate of the day and use it to encourage people to take advantage of this,” Stavroulakis says.
London’s Athenaeum hotel includes soft drinks and complimentary snacks in the minibar as well as free wifi throughout the hotel. This also helps alleviate the perception problem. “We have removed charges, following feedback from business travellers and travel buyers, to ensure the basics of luxury travel and hospitality are part of every stay and experience,” says general manager Jeremy Hopkins. “And this helps business travellers maintain budgetary restraints.”
Kempinski Hotels also consulted clients at a recent showcase. “As a result we will be launching a number of brand initiatives to benchmark us against the competition,” says head of global sales Eleanor Booker.
The one area in which luxury properties can – and should – excel is service, which provides both efficiencies and reassurance, allowing guests to focus on their business, according to Corinthia’s Duckworth.
Such levels of negotiation mean good relationships are key and hoteliers and buyers alike invest a lot in developing and maintaining these. This pays off for both parties, ensuring improved occupancy rates and satisfied travellers, who are benefiting from well-located properties, greater comfort and outstanding service levels, all of which oil the wheels of business.