Leading hotel groups enjoyed rising room rates in 2007 to follow a buoyant 2006, but the price inflation may be about to stop.
A survey by travel management company Hogg Robinson Group reports rates rose in all but five of 50 leading business cities last year.
However, HRG director for global hotel relations Margaret Bowler said: “Growth rates are not at the same level as 2006 and January 2008 was not as strong as expected.
“Rates will not fall apart, but hotels will not be so aggressive this year, especially with corporate customers. We will see prices predominantly flat.”
She added: “We already have corporate clients looking at their travel expenditure. “Where a company might have sent five people on a trip last year, it is now sending two.”
Moscow remained the world’s most expensive destination for business travel last year – ahead of New York – following a 93% rise in room rates since 2004. But Mumbai saw the biggest year-on-year increase in prices at 37%.
The annual HRG Hotel Survey found the price rises for UK corporations partially offset by the exchange rate of sterling. A 24% increase in hotel rates in Johannesburg fell to a 10% increase when converted to British pounds, for example.
Only one in 10 cities showed a decline in rates last year. Prices in Philadelphia fell 5% and there was a similar decline in India’s technology capital Bangalore. Tokyo saw a 2% fall and prices also fell slightly in Bristol and Liverpool.
More cities may see falling rates this year, but Bowler said: “I do not see Moscow and New York rates falling. Both face challenges with availability and will be as bullish on prices as can be.”