Business Travel iQ
Two of the world's largest travel management companies, HRG and American Express Global Business Travel, have recently released research which includes 'rankings' of cities.
The annual HRG Hotel Survey includes a list of the cities with the largest room rate increases and decreases in local currency (to discount any exchange rate effects) and room rate variations in leading cities around the world. It does not take account of volume or purpose of trip, merely the rate. In Europe the biggest rate rises have been in Moscow (21.8%), Hamburg (10.2%) and then a large gap before other cities such as Dublin (5.5%) and Berlin (4.5%). In the US the biggest rise was in Seattle (the 50 Shades of Grey factor?) at 15% and Miami at 9%. On a local currency measure New York hotel prices rose by a modest 1.65%. Indeed by the same token, London fell by 0.7%.
In addition to Moscow the big hotel room rate rises were in South Africa: Johannesburg (12%), Cape Town (23%) and Sao Paulo (16%).
©iStock.com/AdamG1975These cities are destinations for both business and leisure travel so it's interesting to match this up with recent American Express Global Business Travel research which ranks cities by outward UK business travel bookings. Not surprisingly, London is the top UK destination but European and long-haul destinations are changing.
Amsterdam is now the most popular European destination, followed by Dublin. Amsterdam edging out Dublin and the traditionally popular German business cities and Paris is a surprise. Likewise, the top three long-haul destination for Amex business travellers are New York, Dubai and San Francisco — financial and technology centres.
Room rates will change for all sorts of local supply and demand reasons such as an expansion in capacity or hosting an international event such as a World Cup or Olympics. Argentina's local rate actually rose by nearly 50% despite a drop — a change of 55%! — when exchange rates are taken into account.
Business destinations will change as market demographics change.
The important point is that increasing business demand will have upward pressure on rates but it is only one factor in many which will affect average room rates. After all the top long-haul business destination for UK outbound experienced a drop in its room rate.