Inflation fuelled “super aggressive” rises in hotel rates this summer and rate increases are likely to continue next year.
That is according to the partnerships director of a leading hospitality group who told an Institute of Travel Management Trending Summit in London last week: “We’re under financial pressures, airlines are under financial pressures, corporates are under financial pressures. But we’re going with a rate-led strategy next year. Prices are going to continue to go up.”
They described hotel pricing as “super aggressive” this year: “In the third quarter, we were 30% up on rates [on 2019] and that continued into the fourth quarter.”
Dan Beauchamp, American Express Global Business Travel head of global business consulting in Europe, told the summit: “Hotels have increased salaries 10%, 15%, even 20% and we’re seeing that feed through in rates.”
The global travel director at a multinational technology company agreed: “Accommodation rates are going up and it’s really challenging.”
The global head of travel at a major bank warned: “Travel costs are rising and we’ve seen a leap in the cost of managing travel. There won’t be so many trips because of cost.”
Beauchamp added: “No one can calculate the return on investment on a trip yet. [But] you can look at the correlation between density of travel and revenue.”
He forecast increased scrutiny “around why you are travelling”, saying: “We believe there will be less volume of travel. We’re already starting to see that. Travel is particularly impacted by inflation.”
James Marchant, head of business development at easyJet, argued: “What we need is cost stability.”
He noted: “People love dynamic pricing when rates come down but not when they go up.
“The most important thing is to book in advance to save money.
You can save 13% on easyJet if you book a week in advance and 26% if you book two weeks in advance.”
● Corporate travel managers and buyers at the summit spoke on condition of anonymity.