Categories Corporate Travel

2017 hotel forecasts: will your hotel costs increase?

With so much uncertainty in the world at the moment, sparked by US elections and of course BREXIT among other factors, predicting how the travel industry will respond, and whether 2017 hotel prices will increase, is difficult.

Perhaps most easy to calculate is the leisure industry, as specific destinations grow in popularity at the replacement of others flying off the radar, but for the corporate market, it is a little more difficult.

Global 2017 hotel prices outlook

Global 2017 hotel prices are predicted to increase by 1% to 3% in 2017, with the strongest inflation seen in North America and Southwest Pacific – mostly down insufficient supply. An ever-increasing demand for stock in the Middle East will see this region also inflate higher than the rest of the world. Africa and Europe will see the weakest rate growth, reflecting softer demand.


European 2017 hotel prices: deep dive

During 2016 the higher end of the market has seen a reduction in stock increase, whilst budget to mid-priced properties have been on the rise. This reflects a growing demand within the corporate sphere for more mid-range travel options; travelers now being happier to take economy flights for example.

During 2016 corporate travel increased, but spend remained relatively stable as European companies were more willing to let employees travel, but downgraded the parameters of their policy to keep costs lower and maximize growing mid-range stock.

Trends show that travel buyers are finding hotel negotiations slightly more difficult, with hotels becoming stricter on the discounts they are giving, regardless of volume, and becoming more tight on their terms and conditions when it comes to last room availability and cancellation policies. Buyers are responding by negotiating longer deals with their hotel suppliers, to lock in firmer and better rates for their company travel.

The outlook for 2017 hotel prices still looks uncertain with major events such as BREXIT still to come. That said, demand will remain higher than capacity growth and so price change will range from flat to a 2% increase on average across Europe.


Recommendations for 2017

  • Security is high on the agenda when it comes to corporate travel next year. Ensure that you have in place the facilities (provided by Hotelzon) to track your travelers at any time. Duty of care is fast becoming one of the most essential elements of any travel management tool now.
  • Increase the number of hotels you have in your preferred rates in the cities you most use. And, try to negotiate longer terms to lock in preferred rates for your company.
  • Review what you have included in your negotiated rate. Options such as breakfast, wifi or transfer may not be necessary in every city you contract. There could be room here for more negotiation and a reduction in what you pay.

This report was brought to by Travelport Hotelzon with insights by