European hotels are abandoning group business in favor of more lucrative individual bookings, potentially damaging their reliable, long-term relationships with tour operators in the process, a move experts say should travel demand cool due to the post-pandemic boom Might be counterproductive.
But industry experts say that as long as demand and consumers’ willingness to pay premium prices are high, hotels will likely continue to bet on individual bookings and offer fewer spaces to groups.
This shift is nothing new, said Robert Cole, senior research analyst for lodging and leisure travel at Phocuswright, who added, “It ultimately comes down to the revenue optimization strategies of these hotels.”
Tom Jenkins, chief executive of the European Association of Travel Agents, said that as long as interest in Europe is high, travel agencies may have to pivot.
“If this demand pattern continues to grow, there will be pressure on tour operators to reallocate their efforts into areas that can bring added value to hotels,” Jenkins said, adding that to do this they may “Shift focus from peak periods to other areas.” Seasonal products shift to shoulder-season products and off-season products. “
Perillo Tours has borne the brunt of the shift in hotel booking patterns in Italy – in Rome, Venice and Sorrento, where it has had to find alternative accommodation.
Perillo said long-time hotel partners have abandoned group business in favor of reserving space for direct individual bookings, where they can charge more than groups. They’re not the only ones going through this.
Terry Dale, chief executive of the US Tour Operators Association, said: “USTOA tour operator members have commented on contract challenges arising from tight inventory and rising costs, particularly in Europe. , demand shows no signs of weakening.”
Globus and Tauck said their operations have also been affected by these hotel booking practices, and they sometimes have to turn to finding accommodations at similar hotels. But both said it’s not a widespread problem.
“In this case, we can relocate our guests and keep the trip running smoothly by moving to a comparable or better hotel before the trip begins,” said Steve Born, chief marketing officer for the Globus family of brands.
Taoke said some hotels are rejecting group business, but that’s not a big problem for the company.
“Demand for hotel space has definitely increased across Europe, especially in Italy, but we haven’t been affected too much,” said Joanne Gardner, Taoke’s vice president of global operations. “We’ve been very lucky. , have many long-term hotel partners across the continent who truly value Tauck’s business and appreciate the consistency we bring year after year despite short-term fluctuations in demand. Some of these relationships date back many years. This is not a history that can be easily ignored in the first 30 years. At the same time, we have also been able to establish new relationships with other luxury hotels in many cities, and the end result is that our business is no longer restricted in Europe. ”
“The real essence is the relationship between customer and supplier,” says Phocuswright’s Cole. “Is it really a long-term partnership where you’re trying to achieve mutual benefit? Or is it just transactional where you’re trying to get the most out of it?” Benefits.” Is that okay, no matter who your partner is? “
Consultants are also affected
European hotel prices have risen sharply since travel reopened after the pandemic pause. Alexander Robinson, director of industry partnerships at hotel research firm STR, said the current average is about 20% higher than 2019 levels.
European hotels are now booking more than they were this time last year, which Robinson says is driven in part by major events like the Olympics and the Taylor Swift tour. While prices remain high (partly due to rising costs and inflation), year-over-year pricing is normalizing. Demand has been particularly high in Italy over the past two years, and Jenkins says that will only continue next year with the Catholic Holy Year Jubilee, which could exacerbate travel agencies’ problems with availability.
Hotel problems are not limited to travel agencies. Megan McCaffrey-Guerrera, owner of Bella Vita Travels in Lerici, Italy, said prices at nearly all the hotels her agency works with in Italy and France have doubled over the past two years. Ichiban. Some hotels prefer consultants’ individual bookings to travel agents’ group rates, she said, and they sometimes offer incentives to consultants, such as higher commissions or additional amenities for clients.
Karin O’Keefe, owner of FNS Travel Group in Springfield, Mass., said that while some hotels offer services to consultants, space remains a challenge, and she has confirmed cancellations or just asking for a much higher price. Prices available for booking. Across the industry, hotels and some cruise lines prefer booking direct, so no commission is paid, she said.
“They don’t seem to understand that travel advisors are the ones recommending hotels or cruise lines to travelers in the first place, and severing those ties could be detrimental to them in the long run,” O’Keefe said.
Preferred Hotels bucks the trend
At least one upscale hotel said it is open for group bookings.
Preferred Hotels & Resorts’ Twenty by Preferred Hotels & Resorts platform enables travel operators to book hotels in 80 countries, including Europe, without committing to minimum bookings.
Isabella Moroni, Preferred’s vice president of European leisure sales, said the company launched the service because many travel agents only book hotels with which they have contracts. “This is an incredible tool for tour operators and an incredible source of business for our hotels.”
Kristina Yelski contributed to this report.
