It may be wise to evaluate your 2023 T&E budget one more time because hotel prices worldwide are expected to go up again, according to American Express Global Business Travel.
A combination of pent-up demand for in-person meetings and ongoing hotel industry recovery struggles are likely to trigger higher prices and other challenges for securing accommodations.
Keep in mind your peers in the hotel industry are trying to figure out what to do about increased costs related to staff wages (talent is scarce) and energy, as well as food and beverage supplies. At the same time, the industry is trying to recoup pandemic-related income losses.
However, Amex GBT’s Hotel Prices 2023 annual report also said the increase in hotel prices will happen at a slower pace than 2022 due to the economic climate. One notable exception is Buenos Aires, where a 30% hike in hotel prices is predicted due to very high inflation.
Higher hotel price snapshot
Amex GBT’s analysis of top global business hubs, based on historical transaction data and key economic factors, led to these hotel price hike forecasts:
- Atlanta: 5% – Q2 2022 data indicated 62 hotel construction projects (with a total of 8,020 rooms) were scheduled to break ground
- Boston: 5% because of a limited supply of rooms and projections of a 35% rise in demand
- Chicago: 4.5% – it’s home to America’s largest convention center, McCormick Place
- New York: 8.2% due to increased group- and meeting-related travel
- Seattle: 7.5% based on the city’s consistent demand and low room inventory
- San Francisco: 7.3% due to slow but consistent demand recovery (2022 business travel revenue in the city is projected to be 68.8% lower than 2019 levels), and
- Toronto: 6.5% due to the reopening of Canada’s borders (group average daily rate exceeded 2019 levels for the first time in Q2 2022).
Because your road warriors may need to pay more to stay somewhere, it may be worth it to find out from hotel companies if booking in advance will secure the current lower rate. Let your people know that if they book in advance, choosing nonrefundable hotel rate options makes it cheaper than standard bookings.
This is also the time to leverage any preferred hotel vendor relationships your company has. Could agreeing to working with them exclusively lead to benefits like special discounts and preferred booking for business trips? Also, encourage your business travelers to sign up for their loyalty programs to earn rewards.
Staffers responsible for booking lodging may need some pointers on how to utilize hotel rate shopping apps (especially the ones that allow you to book travel and lodging at the same time at a package rate) to analyze the market.
Speaking of market research, doing advance research on a destination city’s hotel room supply and the types of properties coming online in the market can also help make informed, cost-effective T&E decisions.