According to March 2009 ADR figures from Smith Travel Research, rates in the priciest U.S. cities all show declines compared to 2008 statistics from the same month. For example, New York is down 24.4 percent, Chicago 14.7 percent and Boston 7.8 percent. At 9.6 percent, overall U.S. rates have dropped, but at a slower pace.

It comes as no surprise that in the U.S., the luxury segment has seen greater decreases in occupancy and ADR than other segments. According to Smith Travel Research, the luxury segment has seen a decline in occupancy through March 2009 of 15 percent and a decline in ADR of 17 percent.

The dramatic decreases of recent months have left corporate travel buyers with a dilemma. Most agreements for corporate rates are negotiated once a year, usually in the fourth quarter. But with occupancy levels having fallen so sharply since the beginning of 2009, should they tear up the old agreements and re-negotiate now?

According to Mitchell and his counterpart for Europe, the Middle East and Africa Thomas Stoeckel, the answer is that it may make sense to re-negotiate, but buyers should aim to give their hotel suppliers increased market share in return.

"Now may be a good time to re-negotiate," Stoeckel confirms. "Hotels are under pressure because the number of travelers is very limited. They cannot move their buildings to better-performing markets like an aircraft." Furthermore, he adds, hotels cannot realistically expect clients to overlook the opportunity to re-negotiate. "Travel managers have to prove themselves within their own organizations. They are being measured in the savings they generate."

Added Mitchell: "We encourage clients to take the long-term view," he said. "If they can narrow their choice of suppliers and tighten up company compliance to selected hotels, it will carry a lot more negotiating power and serve them well when the upturn comes."

Mitchell has one more tip to offer, which is to compare hotels on the basis of total cost, not just room rate. Some properties are offering complimentary services such as free breakfast or Internet access instead of cutting their tariffs.

"Locations that have numerous properties with the same star rating are often very competitive," he said. "When you include the value adds, it can make a big difference to the final price."

Advito, the independent consulting arm of BCD Travel, echoes this advice. Advito is working with its clients to reopen negotiations with preferred hotels in high volume markets that have seen significant reductions in average booked rates. To identify targets, they are comparing first quarter market-rate reductions to the original savings achieved during negotiations for the 2009 season. Renegotiation efforts are then focused on properties with the greatest gaps in these numbers. Eliminating these gaps by lowering negotiated rate levels or adding in additional amenities such as free breakfast and Internet access will allow clients to lock in these savings and will benefit the hotels by protecting their market share.  Mark