Hotel rates worldwide will increase again in 2023 thanks to pent-up demand for in-person meetings, but at a rate lower than 2022. Photo Credit: GettyImages/BrianAJackson
Hotel rates worldwide will increase again in 2023 thanks to pent-up
demand for in-person meetings, but at a rate lower than 2022 due to the
economic climate, according to a new American Express Global Business
Travel report.
The travel management company in its Hotel Prices 2023 annual report
forecasts rates for the next year in top global business hubs. The
report highlights ongoing hotel industry struggles that will lead to
higher prices for corporate hotel programs.
Utilising Amex GBT historical transaction data with macroeconomic
factors, the report highlights rising hotel rates due to inflation and
the challenge of increased corporate and leisure demand.
The report also flags hotel efforts to recoup income losses from the
pandemic exacerbated by rising labor costs—the combination of which will
be challenging to corporate hotel program managers, some already
struggling to secure accommodations and discounted rates.
Buyers and managers can mitigate some issues—not all—through better
sourcing, Amex GBT suggests. The agency’s Global Business Consulting
advisory arm recommends buyers keep an open mind to include multiple
rate types and utilise rate shopping technologies to continuously
refresh opportunities.
Market analysis will be key for buyers, who should take steps to
understand inventory levels and the numbers and types of properties
coming online in the market. Rate caps in compressed markets can
highlight issues when travelers need to pay more and help indicate
cities where companies may need to negotiate more inventory, according
to the TMC.
Conversations at the property level may need to be had to better
grasp rate strategies and how the corporation’s business fits into the
mix, according to Amex GBT, which suggests volume alone may not be
deciding key issue, as hotels could become reticent to set aside too
many rooms at a discount.
Among major corporate hubs, Buenos Aires, Paris and Stockholm lead
the way as cities expected to have the highest projected year-over-year
hotel rate increases for 2023.
Source: Business Travel News