Hotel groups trying to impose dynamic pricing

Floating rates seem to be making their way into corporate contracts

Some major hotel groups are reported to have started using dynamic pricing – broadly, a time-based pricing model charging different rates for rooms or services depending on demand for that particular day – for corporate contracts. The move was a characteristic of the previous seller’s market. The global hotels company InterContinental Hotels Group, which is reported to have been trying to persuade buyers to accept floating rates for two years, now says that more than 1,000 of its accounts have accepted the implementation of discounts from best-available market rates rather than a fixed rate.

IHG’s stated target was to get 25% of its corporate clients to agree to use dynamic pricing of some kind for 2011. Dynamic pricing is the only way a hotel company can guarantee discounts on 100% of room nights for its clients, said Lara Hernandez, IHG’s director of business travel and worldwide sales. In the past, some major hotel groups have attempted to insist on dynamic pricing, particularly during the previous seller’s market, but most corporate clients have resisted. Now, however, some kind of dynamic pricing, with or without rate caps, is being accepted by around 22% of corporate buyers.



Check Also

IHG, voco, new, brand, luxury, individual, intercontinental, hotels, service, Regent, Convivio, portfolio, Foncière des Régions, UK, Europe, Australia, launch

IHG’s “charming” new upscale brand

voco will combine the informality of an individual hotel with all the benefits of being part of the group.

IHG, sign, deal, Pattaya, hotels, eastern seaboard, Thailand, Ratanakorn Asset, Rayong, Kao Lak, Phuket, Koh Larn, Samui

IHG bets on Pattaya and eastern Thailand

The hospitality giant signs up for eight new hotels in one go, spotlighting Thailand’s changing eastern seaboard.

Principal, IHG, buy, brand, luxury, hotels

InterContinental boosts luxury hotels in UK

IHG says it will become the largest luxury hotel operator in the UK after a new deal.

Regent, IHG, buy, purchase, brand, Asia, Europe, luxury, travel, stay, hotels, chain

IHG deepens luxury presence with Regent

InterContinental Hotels Group has big plans for Regent Hotels & Resorts after buying a 51% stake.

IHG, Karin Sheppard, appoint, management, Europe, managing director, new, Australia, Danish, Aarhus

Dane appointed IHG’s MD for Europe

Karin Sheppard returns to Europe after more than 15 years' IHG experience in different markets.

Scandic, Restel, hotels, business, buy, Finland, chain, biggest, M&A, cumulus

Scandic is Finland’s biggest hotel operator

Scandic Hotels finally completes purchase of Restel and Cumulus