Brussels Hotel Eliminating Fixed Pricing Contracts

As major hotel chains ease dynamic pricing into their corporate transient programs, one popular business hotel in Brussels has taken the bold step of eliminating fixed corporate negotiated rates altogether. [more]
The Hotel Bloom is a 305-room, three-star independent hotel near the center of Brussels that caters mostly to corporate and government travelers. It has nearly completely phased out fixed rate agreements in the past few years, according to Vassilis Syropoulos, director of revenue for the hotel's operator, Pandox. Following a renovation about four years ago, the hotel noticed that it consistently was getting a better rate out of online customers than it was from the corporate negotiated contracts.
"The ideal goal was to not have any fixed contracts at all, and we wanted to get there within two years," Syropoulos said. 'We still have a few fixed contracts, but they represent about 13 percent of our total business."
Large companies have been largely resistant to the move, many opting not to pursue contracts with the hotel, while smaller companies and those based locally have been more accepting, he said. Corporate demand outside of those agreements has helped make up the difference, however.
"Many corporations are telling their travelers that if they find a better rate to just book it, so we are able to capture lots of demand from these customers," Syropoulos said. "It was a bit painful to lose a bit in the beginning, but it works."
Occupancy has not suffered, he said. The hotel runs about two-thirds full on average and near capacity on Tuesdays and Wednesdays. Average rates, meanwhile, have increased about 16 percent since 2009.
Syropoulos said he expects chains to increase their push for dynamic pricing in coming years, but buyers should expect a harder push from some independent hotels. At least one such hotel in Brussels already has taken a similar stance against fixed rates, he said.
"You don't have that kind of relationship that's between a big company and a buyer, which can play to a disadvantage as well, but you can be more nimble in adapting to trends," Syropoulos said. "You have much more leeway in doing what you want."