The average increase for corporate negotiated rates for 2022 will be 10-15% higher than 2021, according to a U.S. Corporate and Hotel Rate Negotiations for 2022 Forecast from Bjorn Hanson, a veteran industry observer who is an adjunct professor for the New York University School of Professional Studies Jonathan M. Tisch Center of Hospitality. The increase, said Hanson, is based on hotel services being restored, sellers being more aggressive to address financial challenges and business and group demand continuing to recover. There seem to be four primary approaches for rates negotiations for 2022, according to the report:

1) Maintaining the rates negotiated a year ago for another year.

2) A discount (typically 10-30% ) applied to a defined rate, often the Best Available Rate (BAR) –often referred to as “dynamic pricing.”

3) A hybrid model based on last year’s negotiated rate or a discount to the BAR, whichever is lower. There remain concerns about this because, for example, these rates are difficult to audit for buyers; and for sellers, property management systems are not designed for setting rates with these options, and many buyers are reluctant to validate this model for future negotiations.

4) Fewer (or almost no) negotiated corporate rates, but guidelines for travelers.

Based on interviews as of the time of this analysis, it is estimated that the distribution of rate negotiation approaches will be:

Maintaining 2021 rates:35-45%
Discount to BAR: 30 -40%
Hybrid: 10-15% No negotiated rates: 10-20%

As was the case last year, issues involved in negotiations often include contractual commitment for health practices. Another new buy side negotiation is for cancellation policy flexibility; cancellation policies have become more rigorous in recent months – both the policies and enforcement. An emerging, not yet common provision in negotiations is disclosure of and/or commitments for hotel and hotel brand and management corporate ESG (environmental, social, governance) practices. These can include third-party generated or confirmed environmental reporting, board of director composition, compensation reporting, and other matters.

Estimates included in this report are based on selected discussions with industry executives and corporate travel executives, analysis of industry financial data, press releases, and information available on hotel and brand websites.