LUCRATIVE HOTEL BOOKINGS DUE FOR A COMEBACK
Hotelier India|February 2022
Long term contracts are going to be a key revenue generator for hotels and a money-saver for group buyers, in a time when bottom lines are contracting
KEN SHANLEY
LUCRATIVE HOTEL BOOKINGS DUE FOR A COMEBACK

From ‘secret menus’ to ‘coupon codes’ that unlock special savings, everyone is currently looking for a deal. However, before the internet made it possible to scour millions of data points to mine these hidden gems, one really did have to ‘know a guy, who knew a guy’ to get deals at hotels.

That is unless they qualified for a long-term contract (LTC) or ‘corporate rate.’ Before, I explain why this type of booking is poised for a comeback, let’s go back to basics – what are long-term contracts?

The concept of long-term contracts is simple; a hotel, or chain, offers a guaranteed room rate to guests from a particular company or agency, in exchange for a negotiated minimum number of rooms, at a discounted rate, within a fixed period.

There are pluses and negatives for this type of booking for hotels. The benefit is obvious: guaranteed income in a challenging market, no matter how situations, like COVID-19, affect demand.

The downside: when the market is stable and demand is high, room rates increase. But if a property has already locked themselves into long-term contracts, that minimises the number of rooms that they can sell to leisure travellers who are willing to pay full price for their stay.

To show you why this type of booking is going to be a key revenue generator for hotels today (and a money-saver for group buyers, in a time when bottomlines are contracting to unheard-of levels), it is important to understand the history of long-term contracts.

BACK TO THE FUTURE

Once upon a time, corporate rates were pretty easy for almost any company to negotiate and their use was policed generously, if at all, by hotels. Anyone with the right business card could access deeply discounted room rates for their business or personal use.

This story is from the {{IssueName}} edition of {{MagazineName}}.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

This story is from the {{IssueName}} edition of {{MagazineName}}.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

MORE STORIES FROM HOTELIER INDIAView all
Why Western Couples Are Choosing India For Their Big Day?
Hotelier India

Why Western Couples Are Choosing India For Their Big Day?

Decoding the reason, and how to cater to them...

time-read
2 mins  |
November 2024
A Match Made in India
Hotelier India

A Match Made in India

Director General of Tourism Mugdha Sinha's grand vision for wedding tourism...

time-read
6 mins  |
November 2024
Tee Off in Style
Hotelier India

Tee Off in Style

Hoteliers are giving golfing facilities a boost even as they offer putting greens that make the sport popular.

time-read
4 mins  |
November 2024
Bespoke Getaways: What Makes Them Desirable?
Hotelier India

Bespoke Getaways: What Makes Them Desirable?

Boutique hotels are increasingly becoming the first choice among discerning guests as they provide meaningful breaks.

time-read
5 mins  |
November 2024
Blending Tradition with Innovation
Hotelier India

Blending Tradition with Innovation

The balance of honouring tradition while adding a dash of modern flair is what keeps the culinary scene fresh and exciting...

time-read
3 mins  |
November 2024
DON'T THINK, OUTSIDE THE BOX
Hotelier India

DON'T THINK, OUTSIDE THE BOX

The oft-quoted maxim, \"Think out of the box!\" does little to encourage creativity or innovation and often is their enemy.

time-read
3 mins  |
November 2024
Putting the Wow into Weddings
Hotelier India

Putting the Wow into Weddings

As hotels become the preferred venue choices for weddings, the industry is certainly shaking things up.

time-read
6 mins  |
November 2024
Innovation Is Not an Option but a Necessity
Hotelier India

Innovation Is Not an Option but a Necessity

Emphasizing the need for the Indian hospitality sector to innovate and disrupt itself in the current transformative period.

time-read
4 mins  |
November 2024
Why Marriott built its GCC in India?
Hotelier India

Why Marriott built its GCC in India?

Drew Pinto, Executive Vice President and Chief Revenue & Technology Officer of Marriott International, tells Hotelier India all about finding the best talent in India...

time-read
5 mins  |
November 2024
FROM POTENTIAL TO POWERHOUSE
Hotelier India

FROM POTENTIAL TO POWERHOUSE

In an exclusive and candid interview with Hotelier India, Gajendra Singh Shekhawat, India's Minister of Culture and Tourism, speaks about how tourism and hospitality will power India's economy by 2047.

time-read
8 mins  |
November 2024