Corporate travel managers and buyers have been dealing with difficulties in securing accommodation at good prices, while hotels struggle with inflation and talent shortages because of a rebound in tourism and business events, according to the consulting firm.
While hotels can benefit from the pent up demand for in-person meetings and events in 2023, the global outlook is unlikely to allow them to achieve rate rises on the same scale as seen in 2022, according to the report.
The study said that London's rates are expected to rise by up to 6.2% next year as hotels face inflationary cost increases for labor and energy. In Paris, room rates may rise up to 10%, as the French capital is set to host events such as the Rugby World Cup and prepare for the 2024 Summer Olympics.
New York should see hotel prices increase by 8.2% in 2023, driven by demand for in-person meetings and continued by resilient leisure demand, it said.
Madrid and Barcelona will increase hotel prices with average increases of 7.2% and 6.6%, compared to the rest of the main business cities in Europe.
The data team combined historical transaction data with macroeconomic factors to create hotel prices forecasts for 2023 after two years of Pandemic-related travel disruptions and uncertainty over the global economy.