Hotel prices are only going to go up

Pent-up demand for in-person meetings is pushing up hotel rates worldwide, reveals Amex GBT report.

Hotel rates worldwide will increase again in 2023 thanks to pent-up demand for in-person meetings, but at a rate lower than 2022.
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



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