Hotel rates will continue to rise in most locations globally during 2024 according to new forecasts from the consulting team at American Express Global Business Travel (Amex GBT).

The Hotel Monitor 2023 forecasts hotel price trends in more than 80 cities based on analysis of millions of hotel transactions and International Monetary Fund (IMF) economic data. 

Despite what the B2B travel platform says will be “an expected softening of leisure travel demand”, business travel, meetings and events are expected to see a continued uptick. 

The Hotel Monitor 2024 has found hotel rates could rise by as much as 17.5 per cent in cities such as Buenos Aires, which it puts down to tight supply combined with local conditions pushing the average cost of a room upwards.

According to the forecast, “despite modest economic prospects and a strong hotel development pipeline, hotel prices are trending upwards in 2024, albeit with reduced velocity compared to 2023”.

European cities can expect to see increases of up to 11 per cent (Paris) with an average rise of 7 per cent across 32 cities. See panel (right) for the highest predicted increase among Amex GBT customers’ top European destinations.

According to Amex GBT travel buyers should be reassessing existing
arrangements and prioritise negotiating better rates in the most
frequently visited hotels and cities.

The report suggests
concentrating spend on a smaller number of providers will help secure
better rates, improved terms and other amenities, even for smaller
businesses.  

Simon Fishman, vice president, global hotel, Amex GBT, said: “With
the softening of leisure travel demand, we and our corporate customers
have an improved position at the negotiating table, meaning we can make
even more rates available to travellers.  

“It’s also the right time to make sure a hotel programme is fit for
the future. More than ever, it’s about presenting travellers with
relevant and personalised options. One might want the best rate, while
another will prioritise amenities and experience.”

Other key findings from the forecast include:

• Most cities should experience rate increases in line with local inflation, following the large price jumps in 2022 and 2023 fueled by a surge of what has been coined “revenge tourism.” Softening leisure travel demand should be replaced by the continued uptick in business travel, and meetings and events;
• The evolution of working culture towards more flexible, hybrid and remote models is having a direct impact on business travel patterns;
• According to Amex GBT there has been an incremental lift in weekend business travel and a shift to fewer but longer business trips pointing towards the continued bleisure trend;
• This has seen global hotel chains expand their extended stay offerings and holiday lettings companies have reported growing requests for high-speed wifi and later departures to facilitate remote working, suggesting business travellers are also increasingly looking beyond traditional hotel accommodation;
• The anticipated changes in leisure travel opens the door for corporates to negotiate better deals with hotel partners for 2024;
• Large increases absorbed during 2023 have put an impetus on travel buyers to manage costs, while according to the Hotel Monitor, rising pressure to meet sustainability commitments adds another dimension to programme building.