The cities of Barcelona and Madrid will lead the growth of hotel rates in 2020, in parallel to the global growth of hotel prices for this year in most cities, according to the Hotel Monitor 2020 report, published by American Express Global Business Travel (GBT).
The report indicates that in the secondary cities is where a greater increase in rates is expected, and that the global boom of the hotel industry is growing the supply of rooms, despite the fact that international tensions slow down demand.
The vice president of Global Business Consulting at GBT, Joakim Johansson, said that despite the signs that the global economy is facing challenges, the number of people traveling for business and leisure continues to grow.
“However, in most cities, the construction of new hotels implies that sustained demand will not allow rates to increase,” he added.
In Europe, a “small increase” in hotel rates is expected in the main business cities, with Barcelona (+ 5%) and Madrid (4%) leading, while medium or small cities such as Sofia or Vienna are expected incrmements between 12% and 5%, respectively.
In the United States, the occupation that remains constant and the total number of rooms under construction will boost competition and limit the ability of hotels to increase prices.
Canada is more likely to experience rate growth, thanks to relatively strong economic development and the slowdown in hotel capacity growth.
Chicago, San Francisco and Toronto will see the biggest increase in hotel rates (5%, 4% and 4%, respectively); instead, rates in New York are expected to decrease by 3% as the 29,000 new hotel rooms planned for 2020 become available.
The report indicates that political and economic uncertainty has had a negative impact on business trips to Central and South America.
However, prices are expected to increase as the demand for accommodation exceeds the growth of the industry in a region that has seen its hotel construction portfolio decrease by 25% year-on-year.
FALL OF MIDDLE EAST RATES
The rise of hotel construction in the Middle East, although mostly centered in the United Arab Emirates, implies that supply will exceed demand and cause rates to fall by up to 10% in Doha and 8% in Riyadh.
In the Asia Pacific region the hotel industry is growing rapidly throughout the region, with thousands of new rooms every year. Despite the increase in capacity, sustained demand in these growing economies will result in an increase in rates.