While the majority of IHG’s preferred accounts currently enjoy contracted rates, its publicly available rates are based on a best flexible model – meaning its rates of the day are scaled according to demand. In providing an alternative to annually-negotiated rate platforms, IHG is addressing growing demand among corporate travel managers for more flexible and market-sensitive hotel rates.
“Corporate travel managers should feel confident they have access to the best possible rates in our hotels. This model guarantees they will pay less than any other unrestricted rates in our hotels, every day of the year,” said Gary Rosen, vice president, sales & marketing, IHG Asia Pacific.
Annualised rates may account for high and low seasonality, but cannot respond to unexpected market conditions. As hotel pricing has become more fluid industry-wide over the last few years, and the number of booking channels has increased, the appeal of dynamic pricing to corporate travellers has grown as well. We’re inviting our preferred accounts to consider this model as amore equitable way to determine the rates they pay on any given day at our hotels.
“Put simply, this model will help travel managers reduce costs when staying at our hotels. It also provides greater booking flexibility, by offering greater access to each hotel’s full room inventory, and removing any blackout dates that may be built into contracted RFP rates,” Gary said. “As the leaders in the industry, we recognise that a programme like Dynamic Pricing is in line with customer expectations, makes it easier for corporate travel managers to track, as well as, being a responsible business practice.”
Under IHG’s dynamic pricing model, preferred accounts will negotiate a set percentage discount off the best unrestricted, daily market rates at any of its hotels. It will also bring its pricing in line with other sectors of the travel industry - such as airlines - where travel managers have learnt to take advantage of advance booking patterns and market conditions to further reduce expenditure.
“We already have a number of preferred accounts on this model. The feedback has been positive, especially as these corporate customers usually end up paying less than their RFP-contracted counterparts. From our perspective, we have seen these accounts place a larger volume of their business with our hotels as a result. Our teams across the region will be proactively approaching preferred accounts over coming weeks to invite them to consider the new pricing model, and answer any questions. In the meantime though, any corporate travel managers interested in considering such an approach with IHG should give us a call,” Gary added.
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