The takeaway: ADRs on the rise

Move asks the experts to analyze business travel news.

MarwanBatrouni1Marwan Batrouni, Advito senior director and hotel practice area leader

The news: The average daily rate at U.S. hotels in December increased 4.3% year over year to $113.42, according to research and benchmarking firm STR. Occupancy increased 4.8% to 52.6%, the highest occupancy in STR’s recorded history, Business Travel News reported, attributing the finding to STR Vice President of Strategic Development Jan Freitag.

Advice for travel managers: “Many U.S. cities are experiencing very high demand and limited new supply, which is driving up prices. Despite this news, travel managers should remember they have leverage,” Batrouni advised. “Companies should not submit to hoteliers’ demands for large rate rises, especially if their spend with them is substantial. Hold to the rates you think are reasonable and below market levels. In addition, continually track and monitor savings and compliance in each market. And, above all, keep auditing the rates your suppliers are publishing.

“Set the stage now for increasing your leverage during future negotiations by channeling more bookings through your chosen TMC and online booking tool now. Volume yields power,” Batrouni said. “Finally, consider using more midscale hotels. Take a good look in all regions at local midscale brands you don’t know well. Some are excellent. Remember, too, that some U.S. midscale brands are higher quality outside their home market.”

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