Hotel prices will keep increasing in 2023 in most of the key cities for business events worldwide as demand for in-person meetings after pandemic disruptions grows, though at a slower pace due to a worsening economic outlook, American Express Global Business Travel said in its annual forecast.
Corporate travel managers and buyers have been dealing with difficulties in securing accommodation at good prices, while hotels struggle with inflation and talent shortages amid a rebound in tourism and business events, the consulting firm said.
“While hotels can continue to benefit in 2023 from pent up demand for in-person meetings and events, the global economic outlook is unlikely to allow them to achieve rate rises on the same scale as seen in 2022”, the report added.
Rates in London are forecast to rise by up to 6.2% next year as hotels face inflationary cost increases for labor and energy, the study said. In Paris, room rates may rise up to 10%, as the French capital is set to host events such the Rugby World Cup and will be in preparations for the 2024 Summer Olympics.
New York should see hotel prices increase by 8.2% in 2023, driven by demand for in-person meetings and sustained by resilient leisure demand, it said.
Cities like Madrid and Barcelona will increase hotel prices in line with the rest of the main business cities in Europe, with average hikes of around 7.2% and 6.6%, respectively.
The company said forecasting hotel prices after two years of pandemic-related travel disruptions and uncertainty over the global economy was challenging, and that the data team combined historical transaction data with macroeconomic factors to generate the prices forecast for 2023.