Sonesta: Dynamic Pricing ‘Having its ‘Second’ in Bleisure ‘Actuality’

Sonesta International Hotel Corp. this year launched three new brands—Sonesta Essential, Mod and Classico—targeted to corporate travelers as companies look for the right fit amid the industry’s “bleisure reality,” Sonesta VP of sales and industry relations Kaaren Hamilton told BTN’s Angelique Platas. Hamilton also discussed dynamic pricing having its moment ahead of the request-for-proposals season, as well as booming meetings and events demand. Edited excerpts follow.

BTN: What kind of business is Sonesta targeting with the three new brands? 

Kaaren Hamilton: It runs the whole breadth of the corporate travel segment. The Essential brand is perfectly positioned for the … traveler that’s on the road all week [or a] couple weeks out of the month [and who] is looking to get in, get out. It’s a very consistent product with a lot of value. Mod and Classico, which are soft brands, are going to appeal to a certain corporate traveler looking for a unique experience. Either a sense of history with the Classico brand or an experience for the contemporary traveler with Mod. [They are] helping Sonesta be a better solution in the corporate space.

BTN: What are corporate clients asking for, and how have they responded to the new brands?

Hamilton: The corporate travel manager is—and we know this because we run a customer advisory board where they give us direct feedback—looking for choices [and] their travelers are looking for choices. And these new brands are expanding that business travel stay. People bristle at the word ‘bleisure,’ [but] it’s a reality. We see the peak on Wednesdays and Thursday nights going into the weekend. Which of course is a post-pandemic trend, but the new brands helped us provide more choice.

BTN: What is the overall business mix for Sonesta? 

Hamilton: The meetings and events segment is very strong, which are primarily business travel. That’s the component within business travel that’s leading the day, and that business is increasingly strong. Demand is stronger than pre-pandemic numbers for business travel. 

BTN: How is the rate environment shaping up for this upcoming negotiating season? And what rate-type mix are you anticipating? 

Hamilton: Most requests for proposals are launched post-[Global Business Travel Association convention], which we’re preparing for, but the environment is very much about offering travelers choice. Travel managers really have come a very long way in their understanding of how we price and what’s beneficial for them. We’re seeing about a 50-50 [mix between dynamic and fixed rates] so far, and we’ve seen dynamic growing over the last year. We’re no longer in a situation where a corporate account says, ‘I won’t even talk to you about a dynamic rate.’ Dynamic is having its moment. I remember 15 years ago trying to provide that education to a travel manager, but they were skeptical. Now, they absolutely understand it and see how we can really benefit their traveler and their ability to understand true value.

BTN: Are you seeing greater demand within small- and midsize enterprises? What’s the breakdown between SMEs and larger corporates?

Hamilton: As with the rest of the industry, we see a lot of growth in the small- and midsize enterprise [segment]. Our hotels are city-center, secondary-market [and] tertiary-market, and we see a strong SME foundation. We’ve developed a couple of SME programs that are specifically targeted at that business. What we like about that business is, those are often companies that are growing themselves versus retracting … but you have to work a little harder for the business.

BTN: How have those SME programs been received? 

Hamilton: We launched Business Pass about 15 months ago. That [program was] designed for a regional company that travels to more than one Sonesta and that doesn’t have a highly refined travel program but wants to be a good steward in terms of duty of care and cost. [Business Pass] was really designed for the unmanaged corporate business. It could be regional, or it could expand across a brand, but maybe it doesn’t really fit all the criteria to be in what we refer to as our managed accounts. 

We launched Sonesta Global Preferred last fall to provide that hybrid solution to the travel manager who’s looking for coverage, wants to track their travelers, wants to understand where their travelers are staying, but provides that dynamic hybrid complement to their negotiated rates with Sonesta. Sonesta’s Global Preferred program is the dynamic rate program [which we made] very attractive by upgrading every traveler in that program to Travel Pass gold status, the third tier of our loyalty program. That’s the part that travel managers have really embraced—and that’s really important to their travelers.

BTN: What about data, which is important to travel managers?.

Hamilton: One of the ways that we add value [in these programs] is by giving accurate data of who’s staying with us, where are they staying, what channel are they booking [and] what rates are they booking—all of that provides valuable feedback to the travel manager. It helps compliment some of the other data they receive from their travel management companies. I learned early on that is an invaluable piece of it [to] help the travel manager understand where the leakage is and how it relates to duty of care—knowing where their companies’ travelers are—and trying to understand the spend levels.