What's Happening?
Independent hotels are evaluating their participation in corporate consortia programs as the market dynamics shift. Traditionally, hotels have had two main options: fee-based programs run by large travel management companies like Amex GBT and BCD, which
require upfront fees and offer significant corporate travel volume, and commission-only programs like ABC, THOR, and WIN, which have no upfront costs but offer less volume. Recently, Amex GBT introduced a 'Lite' tier to its program, allowing smaller properties to participate at a lower cost, following a significant drop in hotel participation due to increased fees and requirements. This new tier provides a low-commitment entry point for independent hotels with corporate demand, offering them a chance to access a larger market.
Why It's Important?
The decision for independent hotels to join corporate consortia programs is crucial as it impacts their ability to attract corporate travelers, a significant revenue source. Fee-based programs, while costly, provide access to a large volume of corporate bookings, which can be vital for hotels located near business hubs. The introduction of Amex GBT's 'Lite' tier offers a new opportunity for smaller hotels to tap into this market without the high costs, potentially leveling the playing field. This shift could lead to increased competition among hotels and influence pricing strategies, ultimately affecting the hospitality industry's landscape.
What's Next?
Hotels must assess their location and corporate demand potential to decide on the best consortia program. Those with strong corporate demand may benefit from the new 'Lite' tier, while others might find commission-only programs more suitable. As the market adapts to these changes, hotels will need to continuously evaluate their strategies to remain competitive. The success of Amex GBT's new tier could prompt other large consortia to introduce similar options, further altering the market dynamics.
