Empty Rooms Move Marriott and Other Chains Closer to Flexible Pricing for Corporate Guests

The corporate travel sector could be edging closer to a more dynamic-based approach when it comes to hotel pricing — with Marriott leading the charge. With supply looking like it will outpace demand for the rest of the year, and well into 2021, travel buyers may gain by switching previous fixed rates over to dynamic rates. Before the crisis, fixed (or static) rates were useful protecting companies from the peaks in room prices. Budgeting was a lot more easy. However, with rates expected to remain depressed, a contract based on dynamic prices — where travel buyers negotiate a discount on the best available rate on the day — will let them take advantage of the troughs in room prices. “If we said the rate is flat, and the market changes … I can’t say we’ll pay $200 for a room, but then that room is $100 on the open market,” said Eric Bailey, global travel manager at Microsoft, at HRS’s Corporate Lodging Forum this week. “We’d lose all credibility from a travel manager perspective. We can put some flat rates in, and keep them, because I understand the industry is hurting … but long term it will be something more dynamic. Even if I wanted to support a hotel, I’m willing to pay this much, but at some point, it doesn’t work if it isn’t what the market rate is.” Leading the Charge There's been a lot of debate over whether cor