DATABANK
THE ONLY WAY IS UP
Is there any sign of hotel rate increases grinding to a halt? Not according to several recent industry reports and forecasts
Rising average room rates
The global average room rate “defied predictions” and rose from $124 in 2021 to $161 in 2022 and to $168 in 2023, according to CWT’s global travel forecast published this summer. In 2024 it is expected to hit $174. The increases are being mirrored in EMEA, where the average rate in 2024 is also expected to hit $174. The average upscale hotel rate is forecast to reach $190 in EMEA next year while the average midscale hotel rate will climb to $136 per night.
EMEA’s increasing average room rates
(average nightly room rate and percentage change)
|
Year |
Average rate |
Per cent change |
|---|---|---|
|
2019 |
$158 |
+3.3% |
|
2020 |
$143 |
-9.5% |
|
2021 |
$128 |
-10.5% |
|
2022 |
$164 |
+28.1% |
|
2023 |
$169 |
+3% |
|
2024 |
$174 |
+3% |
Trends and analysis
Hotels’ increased costs – labour and energy among them – combined with increased demand has pushed hotel rates up rapidly, says CWT in its annual forecast. Simultaneously, hotel construction activity has slowed, creating supply constraints and enabling hotels to “sustain their pricing for longer”, while leisure demand continues to dictate pricing strategy. “This means hotels may not feel obliged to extend generous corporate discounts in 2024,” warns the report.
Rate rises slowing down
Although hotel rates are widely expected to increase in 2024, the rate at which they’re rising should slow, according to American Express Global Business Travel’s Hotel Monitor 2024. It points to subsiding leisure demand and “growing resolve [among its clients] to challenge price increases”. It adds: “On the supplier side, the rising number of unsolicited bids suggests that hotels are ready to engage with corporate customers.” On the flip side, it notes that supply continues to lag demand in many destinations and organisations are still getting to grips with new working patterns.
KEY CITY FORECASTS
(Amex GBT: anticipated 2024 rate rises in clients’ key destinations)
Benelux
Amsterdam +10.8%
Eindhoven +8.9%
Brussels +6.2%
KEY CITY FORECASTS
(Amex GBT: anticipated 2024 rate rises in clients’ key destinations)
France
Paris +11%
Lyon +9.5%
Bordeaux +8.5%
Toulouse +7.8%
Marseille +6%
KEY CITY FORECASTS
(Amex GBT: anticipated 2024 rate rises in clients’ key destinations)
Germany
Berlin +9.4%
Munich +7.2%
Dusseldorf +6.6%
Frankfurt +6.5%
Hamburg +4%
KEY CITY FORECASTS
(Amex GBT: anticipated 2024 rate rises in clients’ key destinations)
Italy
Rome +6%
Milan +1.8%
Turin +0.9%
KEY CITY FORECASTS
(Amex GBT: anticipated 2024 rate rises in clients’ key destinations)
Nordics
Gothenburg +10.1%
Stockholm +9.3%
Oslo +2.4%
KEY CITY FORECASTS
(Amex GBT: anticipated 2024 rate rises in clients’ key destinations)
Spain
Barcelona +9%
Bilbao +8.5%
Valencia +8.5%
Zaragoza +5.5%
Madrid +4.5%
KEY CITY FORECASTS
(Amex GBT: anticipated 2024 rate rises in clients’ key destinations)
Switzerland
Geneva +5%
Zurich +4%
KEY CITY FORECASTS
(Amex GBT: anticipated 2024 rate rises in clients’ key destinations)
UK & Ireland
Dublin +10%
London +9.1%
Edinburgh +8.7%
Manchester +8.5%
Leeds +5%
Glasgow +4%
Serviced apartment price trends
While hotel rates have typically climbed in 2023, the same is not necessarily true of serviced apartments. One leading apartment agency, SilverDoor, analysing its own data, says global average daily rates for one-bedroom apartments fell 20 per cent year-on-year in the period immediately following summer, “perhaps in response to a higher degree of cost scrutiny amongst corporates”.
Average daily rates for one-bedroom units in EMEA have come down from their mid-year peak of £150.59 to their current average of £139.94, reports SilverDoor. Meanwhile, two-bedroom ADRs are “following similar trends but generally are still higher than other global regions”. Summer highs of £233.26 are predicted to drop down below £200. “On the whole, latest trends suggest this downward trajectory will continue as we move into 2024 until rising again around seasonal hotspots.”
EMEA nightly rates by 14-day rolling average
(SilverDoor analysis of 23 million nightly rates for one-bedroom apartments in five key EMEA locations)
Average rates in EMEA are “stable and offering a higher degree of predictability” compared to post-pandemic pricing, says SilverDoor. And although the average daily rate is down 25 per cent, major city rates are broadly similar year-on-year.
“EMEA has been relatively steady for the time of year, except Amsterdam where rates are remaining high,” says Amy Pammenter, head account manager, SilverDoor. “Paris has already started to anticipate the increased demand the Olympics will generate next year: rates are starting to increase and properties are already filling up. We recommend booking sooner rather than later for Paris trips anticipated for July-September 2024.”
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