By Neil Hammond, Partner
Recently, we asked what trends you’ve seen as you wrapped up your hotel program for 2016. Read on to see where rates are increasing and being maintained, what to expect on the amenities front, and what you can do in response.
Rates are up in the U.S…but not evenly.
Although the majority of respondents (69%) reported domestic rate increases between 5-10%, some cities increased more than others. In San Francisco, for instance, 38% of respondents saw increases of 10% or more. Over a third of respondents reported increases of 5% or more in Los Angeles.
In New York, however, over half of the respondents (57%) saw either no change or increases between 0-5% – much less than we’ve seen in years past. Philadelphia, Houston, Phoenix and Minneapolis were also reported as either experiencing no change or smaller increases (between 0-5%) than the other six cities listed.
The world is flat…at least when it comes to international rates.
Almost all (94%) of the respondents to our survey reported flat or slight (0-5%) rate increases internationally for the cities listed. For London, 89% of respondents saw either no change in rates, or increases of between 0 and 5%. In Paris, 40% reported no change in rates year over year. Depending on the strength of the USD and conditions in individual markets, there may be a good opportunity to save internationally on hotel rates in 2017.
The Amenities Front
Despite reports that a supply/demand imbalance would squeeze amenities this year, 69% of survey respondents reported that the amenities offered by hoteliers are “about the same” as last year, and 23% reported more amenities than in years past. Early check out fees are an even split between those that have seen increases, decreases, or have been maintained.
When it comes to cancellation policies, however, a little over 35% of respondents reported increases, which is consistent with what we’ve seen with our clients for 2016. As indicated by the data, this is an area to continue to pay attention to throughout the year.
So what does this mean and what can travel managers do about it?
Some markets are going to continue to be tough to negotiate in for the immediate future, especially where supply is stagnant and demand is increasing, as in San Francisco. Other markets have softened and it may become easier to negotiate in 2017 and beyond. Keeping abreast of these changes over the next year will be essential for reading the market and conducting successful negotiations next fall.Back to all news