Inflation. Easing restrictions. Pent-up demand. Staffing shortages. Higher energy and food costs. All these factors point to higher hotel rates in 2023 across the board, according to a new report from American Express Global Business Travel, but how high can we expect prices to go?
Hotel Prices 2023, developed by our Global Business Consulting (GBC) team, is an indicative forecast of hotel prices in 25 global business hubs. It provides companies with straightforward insights to assist with their planning and negotiations, helping them implement an effective travel strategy to support their business objectives.
While it can be challenging to predict hotel rates after two years of significant travel disruption and uncertainty over the global economy, we have taken painstaking measures to produce this high-quality forecast. To generate Hotel Prices 2023, our data science team combined historical transaction data from our vast data lake with macroeconomic factors using the Prophet algorithm, a model favored when there are strong seasonal effects and several seasons of historical data. We also spoke with GBC hotel consultants around the world to identify local influences shaping rates.
From our extensive analysis, we believe room rates are set to rise across every territory as hotels deal with inflation and seek to recoup at least some of the income lost during the travel shutdown and two years of rollovers.
With hotels experiencing the same talent shortages as the rest of the global travel industry, you can expect properties to take longer to respond to buyer requests for proposals. You also may experience more hotels promoting dynamic pricing over static corporate-negotiated rates for the upcoming season.
To view the price increases (in percentages) we anticipate for hotels in 2023 as well as tips on smart sourcing strategies, download the report now.
Hotel Prices 2023 only provides a snapshot of a complex and dynamic topic. For the insight and execution needed to help you optimize your hotel program, get in touch with the GBC hotel practice line.