WTM Official Press Releases

WTM

06 Sep 2010

Hotels rethink approach to leisure business in response to corporate cost-cutting

Leisure guests will become increasingly important for hotels in the post-recession years, according to a high-level think tank in London this week.

World Travel Market, the premier global event for the travel industry, invited a dozen hotel suppliers and operators from its Meridian Club, which has 24,000 of the travel and tourism industry’s most senior buyers, to the event. The guests – all of whom were at least regional director level - represented all aspects and geographies of the hotel sector. It took place in the Directors’ Lounge at the Emirates Stadium, home to Arsenal Football Club.

In a wide-ranging discussion, which took place under Chatham House rules, one recurring observation was that hotels were looking more closely at leisure business in response to sea changes in the corporate travel environment.

Travel budgets for blue-chips and SMEs were slashed during the global slowdown, and the concern for hoteliers is that even if the world economy picks up, budgets will remain tight. A luxury hotelier said that many companies were now mandating that its travellers could not stay in five-star hotels, while a tour operator with a global reach said that his business was now using video conferencing as a matter of course and that this had now become “learned behaviour”.

A mid-market operator said that some of its properties in France were no longer taking bookings from the MICE sector because of the strong demand from US-based leisure travellers, while another mid-market operator said that it is benefitting from business travellers downgrading.

Responsibility for travel budget is increasingly the responsibility of the procurement department, which appears to be leading to tougher negotiations. “Corporations now want wi-fi access as part of the deal, and they are looking for free transfers, free phone calls and discounts on food and beverage which clearly affects our margins” one hotelier said. “It is possible that leisure travellers might now be more profitable than corporate guests.”

However, leisure guests are also demanding better value for money. A UK-based short break specialist said that customers were still willing to pay a good price for a break, but they wanted more for their money.

Other panellists pointed out that luxury hotels are now expected to offer all-inclusive rates to tour operators, as bigger spending leisure clients are starting to see the appeal of all-inclusive breaks.

Themes such as emerging markets, foreign exchange rates and distribution were also covered in the ninety-minute minute.

“The idea behind the think tanks is to give senior executives the chance to talk openly with one another about their sector,” said Mark Jacobsen, Marketing Manager, Meridian Club. “We will take on board what was said and use it to make sure Word Travel Market, the premier global event for the travel industry, is able to service the needs of all players in the challenging and dynamic hotel sector.”

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About World Travel Market

World Travel Market, the premier global event for the travel industry, is the must-attend four-day business-to-business exhibition for the worldwide travel and tourism industry.

Almost 46,000 senior travel industry professionals, government ministers and international press, embark on ExCeL - London every November to network, negotiate and discover the latest industry opinion and trends at WTM.

WTM, which celebrated its 30th anniversary in 2009, is the event where the travel industry conducts and concludes its deals.

WTM 2009 will generate £1,139 million of travel industry contracts, revealed independent research by Fusion Communications.

WTM is owned by the world’s leading events organiser Reed Exhibitions (RE), which organises a portfolio of other travel industry events including Arabian Travel Market and International Luxury Travel Market.

RE holds more than 500 events in 38 countries throughout Americas, Europe, the Middle East and Asia Pacific covering 47 industry sectors including aerospace & aviation, healthcare, manufacturing and sport & recreation.

In 2008 RE, part of the Reed Elsevier group, brought together more than six million industry professionals from around the world generating billions of dollars in business.

About Meridian Club

Meridian Club is World Travel Market's Business Club for travel buyers visiting WTM, to meet and purchase from exhibiting companies.

Meridian Club membership is awarded to travel industry buyers who are visiting WTM to meet, negotiate and purchase from exhibitors. Meridian Club member company types are made up from the Leisure travel, Business travel and Meetings industries.

In 2008 Meridian Club was the catalyst for more than £41 billion of contracts being negotiated at World Travel Market.

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