The hotel industry is in a holding pattern. The headwinds it faces are uncertainty in the marketplace, talk of the current economic expansion ending, trade wars and a coming election year. This puts pressure on brands to distinguish themselves, and there seem to be more brands than ever—about half a dozen were announced just this year so far—even as demand for apartment-style accommodations, a la Airbnb, continues to grow.
This year's BTN Hotel Brand Survey once again asked corporate travel buyers to list their go-to hotel brands across seven tiers of properties and to rate 13 attributes for each brand they used. Brands like Cambria Hotels garnered enough use to make BTN's list this year. The Choice Hotels brand debuted at No. 2 in the upscale segment, missing the top spot by only one-hundredth of a point.
Still, among multibrand hotel companies, Marriott International led the way with six brands placing in the top three spots of their respective segments, including top honors for upper-upscale hotels, the upper-midscale tier and midscale extended stay. In fact, the upper-upscale Westin is the only brand to retain its No. 1 position in its tier from last year. Hyatt and Hilton each had four brands finish in the top three, while InterContinental Hotels Group and Wyndham each had two.
"I'm seeing in most programs Marriott and Hilton dominate the spend, but people are also looking to challenge that and play one off against the other," said GoldSpring Consulting partner Neil Hammond. Which means buyers are trying to get larger, more strategic deals done at the chain level rather than going through the property level, Hammond said. "Whichever of the major brands can offer buyers a more consistent, more encompassing strategic deal so they can get more work and more negotiating done for less effort—they'll start to win that battle."
Indeed, the brands that scored highest in partnership approach to negotiating rates and cancellation clauses, in flexibility in negotiating amenities and in effective communication with travel buyers typically finished first or second overall for their segments. But another category gained traction this year: safety and security standards. "We are seeing more and more in our programs that people are bringing in their own vetting and inspection programs" for safety and security, Hammond noted.
A September report by industry consultant Bjorn Hanson showed that buyers may be starting to gain back some negotiating power with hotels. He notes that "we are in a different environment" than he's seen in the past. "When occupancy gets high, rate growth is high, but we're not having it this time," he said. "Shame on the brands for letting that happen. How can we be at decades worth of record-high occupancy and not keep pace with inflation?" That's something that corporate buyers, however, probably don't mind.
And though average daily rate, occupancy and revenue per available room each grew somewhere between just 0.5 and 1.5 percent year over year for the period of January through August, they are not dipping into negative territory. Still, STR lowered its 2019 forecast twice this year and as of August predicts year-over-year 2019 RevPAR growth of 1.6 percent, occupancy growth of 0.2 percent and a 1.4 percent rise in ADR.
Methodology
BTN emailed readers who are responsible for corporate hotel buying decisions, and 336 participated in an online survey between Aug. 8 and Sept. 12 to rate the hotels with which they have conducted business in the past year. They rated each brand on 13 attributes on an ascending scale from one to six. BTN reported results only for tiers and brands with significant respondent usage. The survey bases hotel-tier divisions on price-point data provided by STR. STR periodically moves hotel brands to different tiers. The brands in the following charts are placed in their respective tiers based on STR's chain scale segments as of summer 2018, as respondents' answered survey questions based on summer 2018-to-summer 2019 usage.