Most of the hotels that are increasing blackout dates are located in major international cities, such as New York, Chicago and London. As a rule, these destinations host multiple conferences and events during the year, which makes it possible for them to refuse to negotiate room prices, since they know they will have plenty of business. The increase in demand for accommodation naturally causes hoteliers to become less likely to cooperate on rate prices, since they can make more money by raising rates with the confidence that rooms will sell out. Along with more frequent blackout dates, some properties are extending their existing blackout periods to 30 days or longer.
Interestingly, the increased demand is not limited to large international destinations. Even moderately sized cities are becoming travel hotspots, due to sporting events. For example, the city of Austin, Texas, which holds professional racing events and collegiate sports games, has seen a sharp increase in hotel room rates. According to the athletic travel director at the University of Texas, some events attract so much business, hotels are willing to drop long-held agreements with corporate partners in favour of raising individual room rates. “A week before and a week after Formula One events, rates go up on average 450 percent”, said the university director.
Possible effects for corporate travel
A number of hotels are opening up negotiations to corporate travel departments after overestimating the amount of business they would attract during the year. This could continue as more and more hotels are built to accommodate the influx of visitors. As the number of facilities increases, hotels with remaining empty rooms may be willing to negotiate rates to fill up their rooms and suites. While a corporate travel director may be unable to find an affordable rate early in the year, he or she might be able to find a reasonable offer later on.
This makes it important for travel directors to communicate with area hotels and find out about seasonal periods when they would be open to negotiating rates. This is especially true, since some properties may have “hidden” blackout dates – times when they are not really open to negotiation, but that are not freely advertised as unavailable dates for reduced room prices. As meeting planners expect that hotel functions will increase in 2012, flexibility in scheduling business conferences may be the key to finding open rooms for a negotiable price.
