Hotel prices around the world are destined to keep rising next year, albeit at a slower pace than in 2022, according to American Express Global Business Travel's (Amex BGT) 'Hotel Prices 2023' report. The purpose of the annual report is to forecast hotel rates for the coming year in the world's top business travel hubs/destinations.
The travel management company (TMC) attributes the imminent increase to pent-up demand for in-person business meetings that's arisen from the pandemic. However, it anticipates that the cost of corporate accommodations will climb at a lower rate due to the current economic climate.
This year's 'Hotel Prices' report spotlights the hotel industry's ongoing struggles that are expected to prompt price increases in corporate hotel programs. Incorporating Amex GBT historical transaction data and macroeconomic factors into its methodology, the report predicts rising hotel rates in 2023, stemming from the combination of record economic inflation, and overblown demand for both business and leisure travel.
The report also reveals that hotel companies are actively attempting to recoup revenue lost during the pandemic and offset rising labor costs by raising their rates. This is expected to present corporate hotel program managers, some of whom are already struggling to procure accommodations at a discount, with increased challenges.
The TMC suggests that such buyers and corporate program managers can alleviate some of the difficulties by utilizing improved sourcing methods.
Amex GBT has projected that the following major business travel hubs will constitute the top 10 in terms of highest year-over-year hotel rate increases for 2023:
Buenos Aires - up 30 percent due to Argentina's increasing inflation.
Paris - up 10 percent due to a substantial increase in both business and leisure travelers, as well as a number of notable new openings and post-renovation reopenings.
Stockholm - up 9 percent due to an uptick in corporate travel demand, as well as a shortage of hotel capacity for the influx of travelers.
Dublin - up 8.5 percent following its notable recovery in 2022, achieving some of the highest hotel occupancy levels in Europe.
New York - up 8.2 percent due to increased inbound group- and meeting-related travel.
São Paulo - up 7.7 percent due to inflation. Brazil has experienced double-digit inflation points since the third quarter of last year.
Amsterdam - up 7.5 percent due to the city's high tourism rates, which quadrupled year over year during the period from January through May 2022.
Frankfurt - up 7.5 percent due to an expected swell of pent-up demand, given that Germany eased its travel restrictions later than many other countries.
Seattle - up 7.5 percent following the city's consistent demand levels and low room inventory.
San Francisco - up 7.3 percent due to the slow but consistent demand recovery; business travel revenue in 2022 is still projected to be 68.8 percent lower than 2019 levels.
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