Projected hotel price trends for 2023
Hotel prices around the world are set to continue rising next year, albeit at a slower pace than in 2022, according to American Express Global Business Travel’s “Hotel Prices 2023” report (Amex BGT ). The purpose of this annual report is to forecast hotel prices for the coming year in the world’s major business travel hubs/destinations.
The travel management company (TMC) attributes the impending surge to pent-up demand for in-person business meetings stemming from the pandemic. However, he expects the cost of corporate premises to increase at a lower rate due to the current economic climate.
This year’s hotel pricing report highlights the hotel industry’s ongoing struggles that are expected to drive price increases in corporate hotel programs. Incorporating historic Amex GBT transaction data and macroeconomic factors into its methodology, the report projects hotel rates will rise in 2023, resulting from a combination of record economic inflation and exaggerated demand for hotel travel. business and leisure.
The report also reveals that hotel companies are actively trying to recoup lost revenue during the pandemic and offset rising labor costs by raising rates. This should present corporate hotel program managers, some of whom are already struggling to secure discounted accommodations, with increased challenges.
The TMC suggests that these corporate program buyers and managers can alleviate some of the difficulties by using improved procurement methods.
Amex GBT has projected the following major business travel hubs to make up the top 10 in terms of highest year-over-year hotel rate increases for 2023:
Buenos Aires – up 30% due to the increase in inflation in Argentina.
Paris – up 10% due to a substantial increase in the number of business and leisure travelers, as well as a number of notable new openings and re-openings after refurbishment.
stockholm – up 9% due to a rise in business travel demand, as well as a shortage of hotel capacity for the influx of travelers.
Dublin – up 8.5% after its notable recovery in 2022, reaching some of the highest hotel occupancy levels in Europe.
New York – up 8.2% due to the increase in inbound travel related to groups and meetings.
Sao Paulo – up 7.7% due to inflation. Brazil has seen double-digit inflation points since the third quarter of last year.
amsterdam – up 7.5% due to the city’s high tourism rates, which quadrupled year-on-year in the January-May 2022 period.
Frankfurt – up 7.5% on an expected increase in pent-up demand, as Germany eased travel restrictions later than many other countries.
Seattle – up 7.5% following the city’s constant demand levels and low room inventory.
San Francisco – up 7.3% due to the slow but steady recovery in demand; Business travel revenue in 2022 is still expected to be 68.8% below 2019 levels.
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