The GBTA and Carlson Wagonlit's Global Pricing Outlook has become a fixture on the summer business travel announcements schedule. For an idea of what's on the horizon European travel managers could do worse than look at its 2017 Hotel Price Projections for Europe, Middle East and Africa.
Market price forecasts are always problematic because authors inevitably can consider only the data and market conditions in existence at the time of producing a report. As history shows us, unscheduled items such as the Eyjafjallajökull volcano in 2010 have the potential to affect supply and demand and play severe havoc with all the models expertly created and analysed.
The authors point out that the 2017 price forecast was made before the British vote on Brexit and so did not take any account of that result. It does instead say, "Depending on those results, the UK may need to also negotiate new trade relationships with both the remaining EU countries and non-EU countries, negotiations that could take years. The uncertainty will likely impact consumer and business confidence, impacting investments and employment. More immediate concerns include currency fluctuations and the devaluation of the pound sterling, which could make it more expensive for UK consumers when traveling or purchasing outside the UK as early as this year."
Well, it may very well be more expensive for Brits abroad but according to GBTA/CWT research, hotel rate increases in the UK are likely to be the highest in the world.
The EMEA chart shows a divergence between Eastern Europe (-2.4%) and Western Europe (+1.8%). This compares to a projected global increase of 2.5% which is driven mainly by an expected 4% increase in North America, the only region in the world expected to rise other than Western Europe.
The rise in Western Europe is driven very much a 6.9% increase in the UK, followed by a 4% increase in Sweden and 2.7% in Denmark.
The figure for the UK is extraordinarily strong when compared with any other country in Europe or region in the world. The authors point out that this is despite the massive increase in supply created for the 2012 Olympics and another rise in capacity of 12,000 rooms added in 2016.
Like Paris, London benefits from being a leading leisure destination as well as business centre but the authors point out that recent terrorist events and political incidents have been mainly in other European countries and that corporate travel downturn has been in markets such as oil and gas which would not affect demand in London.
With sterling relatively weaker in relation to the euro and the dollar, expect UK tourist demand to remain strong. And given all the business travel necessitated by ongoing trade negotiations and meetings about possible movements of UK-based companies, corporate demand is unlikely to drop.
Hotel rates in London and the UK are likely to stay high despite Brexit.