The Effect of Corporate Cutbacks on Hotels

Amadeus today launched a report commissioned from the Economist Intelligence Unit, into the effect of the economic downturn on executives’ choice of hotel.

Titled, “The Austere traveller – the effect of corporate cutbacks on hotels”, the report finds that executives will make fewer, shorter and cheaper business trips in 2009 and switch from luxury extras in favour of basic efficiency and good service. Fully one-fifth of the 354 executives who responded to the survey in Asia, Europe and North America thought an internet connection was more critical than a quiet room.

“We are entering an age of visible austerity with regards to business travel,” said Antoine Medawar, Managing Director, Amadeus Hospitality Business Group. “With the eyes of their organisations and shareholders upon them, executives are anxious to make business trips as productive as possible. Forget luxury gyms, spas and restaurants; instead concentrate on efficient check-in and check-out and internet access. Good Wi-Fi connectivity is now rated above any other luxury extra. There is a flight to trusted brands and the expectation of a common level of good service no matter where you are in the world.”

“The current economic situation has definitely affected how travellers behave while on the road,” said Oliver Winzer, Regional Director – Head of IT, Amadeus Hospitality Business Group, Amadeus Asia Pacific. “Corporate expenditure such as travel and entertainment are now being scrutinised more closely. Subsequently, business travellers, especially those in Asia Pacific, are now more price-conscious than ever and spending more prudently.”

“This report provides great intelligence to hotels in this region that are feeling their way amidst the new economic conditions. It will help them to identify the characteristics of the evolving corporate traveller, and cater to changing needs accordingly.”

47% of executives surveyed will be taking fewer trips in the next twelve months, and over a quarter (28%) expect to downgrade from 4 and 5-star hotels. In addition, 63% of respondents expect their companies to use the economic downturn to extract the best possible rates from hotels. A huge proportion of executives – 61% – said a trusted brand with uniform levels of service across locations would be a decisive factor when choosing a hotel in 2009.

When asked which features they simply could not do without, business travellers were impressively devoted to productivity on the road: internet connectivity is indispensable to more business travellers (76% of respondents) than a quiet room (56%), good transport links (54%) or central location (52%).

These findings suggest that business travellers measure value by price and guaranteed uniform service and efficiency. Respondents cited efficient check-in and check-out (68%), flexibility to change requirements (64%) and rapid resolution of problems (59%) as the best indicators of good hotel service. Almost a third (29%) also appreciate hotels which remember their preferences.

“It is clear business travellers’ expectations are changing,” said Bill Ridgers, chief analyst for travel and tourism at the Economist Intelligence Unit. “Economic pressure means executives care less about luxury and are instead concentrating on whether hotels deliver on the simple things. In an age of increasing time pressures, security fears and greater bureaucracy – when the conventional wisdom sometimes seems to be that business travel has become something of a chore – perhaps the most heartening finding of the research is that executives still enjoy and see the benefit of travelling for work.”

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