PRICING PERPLEXITIES

Content fragmentation? That's nothing new in the hotel space, but some say disparate content and multiple price points are more problematic for buyers than ever

By Nick Easen (published 31 July 2025)

By Nick Easen (published 31 July 2025)

Making sense of pricing is becoming more challenging for buyers. While the number of headlines around content fragmentation and pricing in air travel has soared, it is no stranger to corporate accommodation programmes either.

There are a number of reasons, including the rise of attribute-based pricing, the maturing of dynamic, drip and personalised pricing, and the growing number of content sources. This has led to a proliferation of price points, which makes it increasingly difficult to make accurate comparisons when budgeting.

Hotel chains have also invested vast sums in revenue management technology and are focused on direct bookings and loyalty schemes ¨C decision making with this level of complexity isn¡¯t easy. This was evident in an Institute of Travel Management (ITM) survey of travel managers, which found that 50 per cent did not have access to the hotel content and prices they needed for 2025.

¡°There¡¯s often no single source of truth that captures all hotel bookings. Adding to this problem, there are widespread inconsistencies in the information shared across booking platforms from room types and inclusions, to rate descriptions and payment modes, which make it difficult to compare options and make informed choices,¡± explains Sam Gilbertson, head of marketing at HotelHub.

At the same time, corporates face a wide array of rate types, from contracted company rates to chain level discounts, public rates via GDS and their discounted equivalent, not to mention TMC-negotiated rates and those via aggregators such as Expedia or Booking.com.

¡°There is tedium in all this and nothing new has been added to the market. It also means negotiations can be lengthy and time consuming, all compounded by increased demands during the hotel RFP season,¡± expresses one travel buyer.

TWO SIDES TO THE STORY

This fluid hotel pricing environment is a double-edged sword, to the chagrin of procurement departments who crave consistency. ¡°Dynamic pricing is undesirable when it challenges budgets and where alternative options are limited, but it¡¯s attractive when volatility is driving prices down,¡± says Scott Davies, CEO of the ITM.

Managing this level of pricing complexity requires buyers to take a step back and put together a more structured hotel programme. There is already a realisation that the RFP process, which aims to put a fixed price on a standardised offering, is fast becoming obsolete.

Many companies already have strict caps for hotel rates, which helps set lines in the sand. But businesses need to go further and adopt a more active and dynamic hotel strategy that reflects the times, rather than a passive one, combining travel policy, data and technology.

¡°A thorough understanding of travel spend and objectives, based on accurate, consolidated data from sources such as TMCs, hotel chains, credit card providers, and expense systems is essential,¡± says Nabil Tigrine, senior consultant for CWT Solutions Group.

Travel managers should then use data analytics to audit dynamic rates against market benchmarks. Comparing apples with apples and pears with pears is vital.

¡°You need to be able to capture enough hotel data in the past to be able to compare this to a baseline over time. You can then say that the average daily rate or ADR for a destination is this price and how this trends over the year. This can now be benchmarked by hotel brand and against other corporates, including their negotiated and static rates,¡± explains Alexandra Saenz, vice president, consulting, for HRS.

Stuart Winstone, CEO of serviced apartment company SilverDoor, also points to the importance of data. ¡°Across the long-term stay and business travel sectors, we are witnessing a transformative shift in how data is adopted and applied, and its role. Data is rapidly evolving to assume the role of 'strategic currency', central to negotiating RFPs, informing policies, guiding budgets, and shaping long-term accommodation and travel programme strategies.¡±

Winstone continues: ¡°Historically, rate negotiation was the cornerstone of travel programme management. Today, however, a more forensic understanding, and broader definition of cost is emerging and being qualified by broader data sets. This encompasses not only financial metrics but also carbon emissions, commute times, and employee wellbeing, all factors which are seeing greater consideration throughout the programme management process from RFPs to reporting and reviews, because there is more data, and therefore more understanding, available.¡±

If buyers are consistent on what they want from accommodation partners, with respect to room nights and incidentals, then they are also more likely to receive more dependable answers on pricing from the sector. There are also a myriad of tools and tech now available that allow better comparisons, including rate assurance tools and those that standardise rate attributes.

¡°The key is also to shift the measurement of success, instead of asking: ¡®did we stay within our negotiated rate?¡¯. The more powerful question becomes: ¡®was the dynamically-priced rate we paid fair and competitive relative to the real-time market conditions?¡¯" says Simon Carmouche, product director at PredictX.

SHOW YOUR POKER FACE

In many ways the fluid nature of today¡¯s hotel pricing market means that buyers should approach it like they would a game of poker ¨C all they can do is lay out their table stakes, be sure of what cards they¡¯re holding, adopt a clear strategy and hope for the best. Everyone is trying to ¡®game¡¯ the system in order to optimise their travel spend, especially now, when there are no hard and fast rules.

For instance, one buyer talks about the benefits of taking a continuous sourcing approach. ¡°Moving away from annual agreed rates and adapting policy to align with the changing market fluctuations and external factors is our attempt to get the best value for the traveller,¡± they say.

Certainly, there are pitfalls associated with such a fluid hotel pricing environment, especially to do with direct offers to business travellers from global hotel chains. This is where adhering to policy matters.

¡°While personalised pricing via loyalty schemes can be tempting for travellers, it often comes with hidden costs or inflexible terms. By providing side-by-side comparisons and reporting, this exposes the true cost of direct bookings and empowers travel managers to make the case for programme compliance,¡± says John Stephenson, managing director of Your Travel Corporate.

Obviously having a travel policy, which includes granular details on hotels, F&B spend and incidentals, will help iron out some of the issues around pricing. When policy is more prescriptive this allows easier comparisons. Pushing volumes towards certain hotel chains can also lock in keen prices, as does booking early.

¡°The real challenge for travel managers is that if you aren¡¯t sending customers at volume to certain hotels, then it¡¯s really difficult to have a conversation with suppliers to negotiate preferable rates,¡± says Katie Skitterall, group commercial director of Direct ATPI. She adds: ¡°When it comes to loyalty schemes and personalised pricing to get discounts, I say - let them. As long as it¡¯s within the travel programme, some of those discounts may well be worthwhile.¡±

THE UNCONSCIONABLE RISE OF AI

The use of artificial intelligence, particularly generative AI also makes things trickier. Travel managers can expect even more personalised and attribute-based pricing as the technology matures. It will target one-on-one deals effortlessly. Buyers will need to rely on AI themselves and utilise smarter sourcing and predictive analytics to stay ahead of the curve. It¡¯s why a number of suppliers are developing tools that can help.

¡°AI will become the most disruptive force in hotel pricing. AI-driven revenue management systems will make pricing decisions that are faster, more granular, and more opaque by analysing vast, unstructured datasets like social media sentiment and news reports. The information asymmetry between hotel suppliers and corporate buyers is set to grow exponentially,¡± concludes PredictX¡¯s Carmouche.

GET SET FOR SHIFTING SOLUTIONS

  • Upgrade your skillset Successful buyers of the future will have to become better data scientists who are able to deep-dive into data and identiy ¨C and influence ¨C booking behaviour.
  • Shift to performance management With greater pricing dynamism, managers should be less fixated on sourcing and more focused on real-time monitoring and negotiating.
  • Become a tech architect Whether it is using agentic-AI, a myriad of dashboards or tech-enabled platforms, managers will need to be savvy digital operators to make sense of pricing.