Corporate contract rates are forecast to increase, with a national average of 5.5 to 6.5 percent for 2015, according to a trend analysis report by Bjorn Hanson, clinical professor with the NYU School of Professional Studies Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management. The emerging outlook shows the biggest increase since NYU started preparing this forecast.
Corporate and contract rate negotiations generally begin during September and continue into December. Corporate and contract rates represent almost 20 percent of occupied U.S. room nights and almost 30 percent of U.S. lodging industry revenue.
For 2014, average negotiated rates (ADR) increased approximately 4.5 percent, compared with the overall ADR increase for U.S. hotels of about 4 percent.
A trend that accelerated in 2012 and 2013 was to charge separately for some services and amenities instead of including these charges in negotiated room rates. In 2010 and 2011, there had been a trend for corporate and contract rates to include services and amenities including internet access, fax charges, use of fitness centers, and breakfasts; that practice is generally being reversed.
Another trend that is continuing is for buyers to reallocate the portfolio of contract rate hotels to include more upscale, select-service and limited-service hotels in place of upper-upscale hotels and full-service hotels.
Some corporate travel departments allow travelers to select hotels that are not included in the portfolio of hotels with negotiated rates. This can be especially popular among younger travelers and can have the effect of lowering the overall average rate while increasing travel experience satisfaction.
