Surrogate Buyers in Corporate Buying of Luxury Hotel Rooms

Abstract

Hotel industry is a significant stakeholder in the Indian tourism sector. According to Knight Frank research, 2008 Indian hotel industry is currently adding about 42,022 five and four star category rooms in the major cities. Hotel demand has grown much faster than supply, but the need to market the hotels, optimally remains. The persons who handle the travel arrangements for corporate houses are not buying the hotel services for their own personal use. This is the reason why, they can be termed as surrogate buyers. An identification of the how these surrogate buyers contribute to sales of luxury hotels, is what the researchers are trying to establish through this research. A study of a stratified sample of Sales Managers of all the hotels which fall into the luxury category of hotels in the city of Kochi, Kerala is undertaken during the first quarter of 2012, using the tools like a questionnaire and personal interview of Sales managers of these hotels. Thus the observations were arrived at. Hotel managers have to recognize this fact and should try to pamper these surrogate buyers by creation of business relationships. Also we would like to argue that that out of all the room business received from corporate, almost all (up to 95%) are routed through these surrogate buyers and they are definitely a business source. Managing them can surely bring additional business for any luxury hotel.

Keywords: Hotel, Bookers, Surrogate buyers, Corporate business