September 18, 2013

U.S. hotel corporate rates to increase by 5% for 2014

Negotiated corporate hotel rates for 2014 will increase by 5 percent to 6 percent compared with 2013, according to an estimate released by New York University Tisch Center for Hospitality divisional dean Bjorn Hanson.

Each fall, U.S. companies and hotels agree to corporate rates and amenities for the following year, and this year, Bjorn Hanson, divisional dean of the Tisch Center for Hospitality at NYU, says the two sides are further apart than normal as negotiations get underway.

Business travelers are a lucrative market for hotels: Almost 20% of occupied U.S. room nights and almost 30% of U.S. lodging industry revenue come from corporate and contract rates, Hanson says.

Occupancy levels and average daily rates are up at hotels across the country. Now that the economy has improved and people are once again traveling, hotels aren't as willing to drop corporate rates or throw in perks such as free Wi-Fi and breakfast.

This year, the average negotiated corporate rate increased by about 5%. The average daily rate for U.S. hotels overall went up about 4.5%. Hanson based his study on interviews with industry executives and financial data.

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