Corporate Travel Manager

More interesting research from Smith Travel today. According to recent data for five major markets—Orlando, New York City, Chicago, Atlanta, and Phoenix—transient room premiums are now discounts, meaning group rooms are more expensive than transient rooms.

This fact is not uncommon for a down market; in fact, STR notes the same occurrence post-9/11. But obviously for planners, who generally negotiate group rates based on prevailing transient rates, this trend is a problem. It's cheaper to pay for a transient room, but canceling your group room block most likely means you'll have to face hotel penalties as laid out in your contract.

So what's a planner to do? Jan Freitag, VP, global development, STR, notes in an article on HotelNewsNow that some travel managers have been approached by group hotels with offers to lower the negotiated group rate in order to match the lowest available transient room rate. This seems like an ideal scenario: planners get a great deal, and hotels avoid facing planners who cancel group rooms and rebook them individually.

But still, is it a likely scenario? Has anyone else seen a hotel taking such a proactive approach?