2017 may be the year of the planner once again, based on a recent trends analysis report from the Jonathan M. Tisch Center for Hospitality at the NYU School of Professional Studies.
“U.S. hotel occupancy in 2015, approximately 65.5 percent, was the highest since 1984 and consensus forecast for 2016 at the time of the negotiations was for occupancy to increase, so the balance of power in negotiations favored sellers,” said Bjorn Hanson, PhD, a clinical professor within the Jonathan M. Tisch Center for Hospitality. “Actual occupancy will be slightly lower than occupancy in 2015.”
In the report, Hanson goes on to detail four factors that will have the greatest effect to shift the balance of buyers that include a continued drop in occupancy in 2017, a sense that planners have been “overpaying” in contract negotiations in 2016, a drop in published hotel rates and the rise of Airbnb and its continued partnerships with industry heavyweights such as BCD Travel and Carlson Wagonlit Travel.
Hanson also noted that CFOs and corporate managers are facing a challenging earnings environment and they are looking to control travel costs, especially in regard to the cost of hotels. All of these factors may mean better deals in contract negotiations for planners moving forward in 2016 and 2017.