Where will hotel room rates rise the most in 2024? Paris, Delhi, Chicago and Jakarta among the top 10, Hong Kong to see the lowest rise in Asia, forecast shows
- Hotel room rates are forecast to rise in more than 80 major cities, according to a new report. In some cases a rebound in business travel will fuel demand
- Three cities in India are among the 10 facing the biggest increases. The forecast rise for Hong Kong, 1.9 per cent, is the lowest of 19 cities in Asia surveyed
Hotel room rates in major cities from Boston to Mumbai are expected to jump by double-digit percentages, even after predictions that prices were finally hitting a ceiling, according to a new report.
Buenos Aires in Argentina takes this year’s crown, with rates set to jump by 17 per cent year on year, according to the Hotel Monitor 2024 report from American Express Global Business Travel (Amex GBT).
It examines hotel prices in more than 80 cities around the world, with its forecasts based on criteria such as currently listed prices, broader macroeconomic trends, projected hotel openings and historical data.
Hotel prices reflect much more than a destination’s current popularity with travellers.
In the Argentine capital, rates are largely being driven by the country’s hyperinflation, which in September reached its highest level since 1991.
However, since the Amex study calculates rate increases in local currency, the rising prices in Buenos Aires are still likely to translate to deep savings for most people visiting from abroad.
Mumbai has a more straightforward narrative. Its hotel rooms are expected to rise in cost by 15 per cent year on year, which is undoubtedly a product of fast-growing domestic wealth and a long-delayed post-Covid-19 pandemic travel recovery.
Given both those factors apply countrywide, it’s no surprise that two other Indian cities are in the report’s top 10: Chennai and New Delhi rank fourth and seventh, respectively.
Rounding out the top 10 are cities where tourism has been booming. Whereas Cairo in Egypt has benefited from largely leisure-driven travel, Chicago, Paris and Boston rank in the top 10 thanks to gains in business travel.
In China, Shanghai is forecast to see the highest rise in room rates (8.4 per cent) followed by Guangzhou (7 per cent), Chongqing (6.3 per cent), Shenzhen (6.1 per cent), Beijing (4.9 per cent) and Hong Kong (1.9 per cent; the lowest of all 19 surveyed Asian cities).
The region with the most moderate rate increases is Australasia, where no single city is projected to see increases greater than 6.8 per cent.
Prices are expected to rise at least somewhat in all the cities examined in the report.
David Reimer, executive vice-president of global clients at Amex GBT, sees several macro trends continuing to influence hotel pricing at a global level.
Staffing shortages continue to be a problem in the hospitality industry, forcing some hotels to limit inventory – meaning they’re leaving rooms deliberately unsold – as a coping mechanism.
That spreads soaring operating costs among fewer customers.
Then there’s the issue of supply – the number of hotel rooms in any market – not keeping up with the demand.
“Where there is lagging supply but demand remains high, rates will also rise,” Reimer says.
The inverse can also be true. Rates are predicted to rise only moderately in cities such as Riyadh in Saudi Arabia and New York, which will add a large number of new hotel rooms in the coming year.
Boston, on the other hand, has few new hotels in the works – which will be problematic for consumers as the city continues to show strong growth as a business travel hub, in addition to its perennial leisure and university-related travel demand. That explains the city’s 11.3 per cent projected spike.
“Although there’s been a lot of talk with respect to the continuation of remote work, we’re seeing some kinds of business travel actually surpassing 2019 levels,” Reimer says.
Specifically, it’s people travelling for trade shows or small internal meetings of 20 people or fewer, he says.
At some companies, he adds, trips related to those more intimate corporate functions have surpassed 2019 levels by as much as 25 per cent. “We think that will continue to be our fastest growing segment,” Reimer says.
Of course, even with the projected hotel rate increases, some of these cities still offer deep value.
A room at an over-the-top hotel in Buenos Aires during peak season, for example, can cost US$600 a night; a 17.5 per cent increase would add just a little over US$100.
Compare that with US$2,000 a night in Paris during high season – the current going rate at a palace hotel – and the smaller seeming 11 per cent increase, or around US$200, there adds twice as much sting in absolute terms.
Here are the top 10 cities where hotel prices are set to rise most dramatically year on year – along with how much more you can expect to pay in local currency.
10. Jakarta, Indonesia: 10.9 per cent
9. Paris, France: 11 per cent
8. Boston, US: 11.3 per cent
7. Delhi, India: 12 per cent
6. Chicago, US: 12.6 per cent
5. Bogotá, Colombia: 14.1 per cent
4. Chennai, India: 14.6 per cent
3. Cairo, Egypt: 14.6 per cent
2. Mumbai, India: 15 per cent
1. Buenos Aires, Argentina: 17.5 per cent
Additional reporting by Staff Reporter
