Dispatch 16

Corporate travel managers polled this spring by the Global Business Travel Association claimed substantial gains in hotel bookings using online booking tools. Among more than 150 buyers surveyed, 42 percent said bookings through OBTs increased during the prior year (versus 7 percent indicating a decrease), and 74 percent said they expected them to increase during the next three years, versus 3 percent projecting a decrease.

By contrast, 14 percent said that direct hotel website or phone bookings had increased, while 34 percent noted decreases. Seven percent expected them to grow in the coming three years and 60 percent anticipated a drop. Hotel companies including Hilton, Marriott, and Omni have made significant efforts to capture direct business travel bookings, albeit primarily among small to medium-sized companies that are unlikely to have travel managers responding to GBTA polls.

Although fewer respondents said bookings using travel management company “preferred” or “consortia” rates increased versus decreased over the past year (14 percent compared with 19 percent), more than one in four expected their companies’ use of TMC rates to grow over the next three years, versus 17 percent forecasting a decline. In addition, one in 10 said bookings on consumer sites like Booking.com grew during the prior year. A similar share expected growth in that category over the next three years.

Meanwhile, 55 percent of buyers said they were interested in non-GDS booking options through companies like DerbySoft and Katanox, with about two-thirds interested in the potential for such solutions to deliver lower prices and more content. About one-third named rate accuracy — less rate squatting, fewer rate loading errors — as potential benefits.

Sponsored by Radisson Hotel Group, the survey went to travel managers and buyers in the United States and Europe.

The closure of the Nebraska-Iowa Business Travel Association about two years ago left a gap in local education and networking that a new organization is now trying to fill. The former GBTA chapter shuttered due to low engagement from buyers, sources said. Now, Executive Travel business development manager Joshua Buresh serves as executive director of the new group, the Nebraska Travel Managers Network, whose board consists of four buyers and three supplier representatives. Their first meeting next week in Omaha features an appearance by Miriam Moscovici, VP of partnerships and research at BCD Travel. The organization charges suppliers for sponsorship, and for now, has no fee for buyers. The initiative is not meant to challenge GBTA, organizers said. It’s not the first local organization outside the GBTA tent. In addition to informal benchmarking and networking groups, the former GBTA Pittsburgh chapter remains an independent entity.

American Express Global Business Travel got another credit rating boost, from Fitch Ratings on Monday. It followed similar revisions over the past couple of years, thanks mainly to an improving balance sheet. “Over the medium term, Fitch expects GBT to leverage its competitive position, supported by its technology and high-touch capabilities, to gain market share,” the company wrote.

Reaction: Thank you, Steve Reynolds and Susan Lichtenstein, for commenting here, and Steve again here. And thanks to Richard Clowes for commenting here.

Go FiguresPithy Wisdom

“Agent [hotel] commissions went up 6 percent in 2024. As we continue to wishful-think that the OTAs will go away or are going to be a smaller portion of the pie — whatever we want to convince ourselves of — the reality is that there’s strong competition, and distribution costs are on the rise, together with labor costs for certain markets on the rise, together with the loyalty program fees on the rise. That’s actually part of the business that is worth rethinking: It takes so much cost and work to get that dollar on the top line … could you have gotten that dollar on that top line from another cheaper channel or a more direct channel? So it’s very concerning, but the reality is that revenue is king, and hotels are struggling not to use those third-party channels that are really expensive.”

Andrea Grigg, CBRE senior managing director and global head of hotel asset management, at the NYU International Hospitality Investment Forum on June 2