August 21, 2013

HRG: Corporate hotel rates up, but growth weaker than expected


Average corporate hotel rates during the first half of 2013 rose year over year in most global markets, according to Hogg Robinson Group's interim hotel survey published on Monday, although many such increases were well below the levels the travel management company anticipated.

The survey, created from a combination of actual room nights booked by HRG clients and "industry intelligence," showed average room rates, measured in British pounds, were up in 35 of 50 top cities worldwide, including all measured North American cities. Many of those increases, however, did not rise with market expectations, in many cases because of increased supply, according to HRG director of global hotel relations Margaret Bowler. That could change in the coming months, however.

"On the whole, occupancy is increasing faster which, coupled with continued high demand, means we will be likely to see rates climbing in certain markets in the second half of the year and beyond," Bowler said. "The below-expectation increase in [average room rate] is not likely to last, and we expect to see further ARR growth into the second half of the year and an interesting 2014 [request-for-proposals] season."

The largest average rate increases in local currency terms were Munich (34.6 percent), Barcelona (19.1 percent), Tokyo (19 percent), Pittsburgh (19 percent) and Cape Town (18.8 percent). HRG noted that Pittsburgh is benefiting from corporate demand in the health, research and steel industries and has a supply shortage, while Barcelona, Cape Town and Munich all had solid convention business during the first half of the year.

Get the full story at Business Travel News

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