While leisure travel has fueled early demand growth, many say the real sign of sustainable recovery will be when business travelers hit the road again. After all, corporate travel has historically represented the lifeblood of hotels, representing upwards of 60% of the industry's revenue. Many convey the first visible step toward sparking meaningful business travel will be when companies return to the office. There is optimism, and some wavering concern, as the industry awaits what exactly this will look like come fall, once summer vacation demand subsides and the baton is passed to the business travel community.

The Global Business Travel Association forecasts business travel to reach approximately 60% of pre-pandemic levels in 2021, with full recovery expected by 2024. Continued rollout of vaccines, loosening restrictions across the country and globe, corporate travel budgets, economic growth, labor market and airfare pricing are just some of factors that will dictate how quickly corporate travel will resume. The pace will likely vary by industry and market.

The good news is, we are starting to see some early signs of life from the corporate travel community. Across CHMWarnick’s asset management portfolio of more than 70 hotels, properties are beginning to see green shoots of corporate transient travel, with month-over-month roomnight growth approximating 25% during the months of March and April, which is encouraging coming off of a corporate flatline for most of last year. Now is the time that hotel owners and asset managers must work in tandem with their operating teams to ensure they are positioned to identify, capture and grow early emerging sources of business travel to optimize recovery.

Here are some best practices for optimizing corporate travel opportunities right now.

As very few corporate contracts were negotiated in 2020, the terms and rates may not necessarily be relevant in today’s market and could be influencing behavior that limits the ability to accurately track business travel, as well as dilute rate.

For instance, business transient guests may not be booking the negotiated corporate rate if they find lower rates on online travel agency and other booking channels, costing the hotel more in commissions. Conversely, these guests may be booking negotiated rates on weekends, taking advantage of lower rate availability during peak leisure periods, limiting rate potential. This is an area where revenue managers and sales teams need to pay particular attention and focus on strategies for preserving rate and encouraging direct booking as business travel begins to slowly flow back into the mix.

Early recovery is not about waiting for the old demand to return, but rather identifying the demand that exists today. Engage the front-desk staff among other line employees to inquire about the guest’s visit. Although many operators already encourage this, emphasizing the importance of identifying where business is coming from and the nature of travel during in these early days is more important now than ever. This is valuable information for the sales team to gain an understanding of the current business traveler, so they can target specific markets and industries.

The sales team also should investigate new sources of demand resulting from business reopenings or developments — including retail, restaurants, office space — within the market. This is a good opportunity to reach out to understand potential hotel demand associated with these activities and/or projects that may be new to the market or create temporary demand as they look to open — for example, training and strategy meetings.

There is a continuous balancing act between the cost of bringing sales individuals back and the opportunity for future demand growth. For the most part, teams have been able to keep their heads above water with the reduced staffing, but production and relationships may be in jeopardy if there is not a proactive plan in place as business resumes. Reassessing staffing assumptions and deployment of those sales individuals is imperative to ensure optimal recovery, especially in light of lost booking time.

Most industries and organizations likely experienced restructuring within the past year. This means sales teams may not have the same point of contact they did pre-pandemic. Rebuilding and activating these relationships are key to future production. Check in to determine how the hotel may best assist them as they return to travel. This proactive approach is also a good reminder to clients that the hotel is ready to welcome them — with enhanced safety protocols and available amenities/services — when the time is right.

Track and examine your corporate negotiated rooms week to week. Key in on early travel adopters and identify what is most important to them as they travel today. Flexibility on the operator’s side is essential, as long as there is a return on investment for the owner. Teams should also be proactively tracking when corporate accounts are expected to resume travel and at what levels. Establish a cadence with the team to connect with clients moving forward.

Being one step ahead of the competitors during this difficult time can make a significant difference in future relationships and production. With many offices reopening this summer into the fall, experts expect an uptick in business demand so be sure your team is growing their relationships and capturing the early sources of corporate travel now.

Elizabeth Hamilton is an Associate with CHMWarnick.

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