Rising Hotel Room Rates Expected in 2024, BCD Travel Forecasts 6.8% Global Increase

According to a recent outlook by BCD Travel, global hotel rates are poised for a significant rise in 2024, with an average increase of 6.8 percent anticipated. This trend reflects the ongoing changes in the hospitality industry as it navigates post-pandemic recovery and evolving market dynamics.

BCD Travel’s analysis indicates that despite a potential slowdown in the pace of recovery, the demand for hotel accommodations is set to continue exceeding the available supply in numerous markets. This imbalance is partly due to the time required for new hotel projects to come online, with development rates varying across different regions.

Interestingly, the focus among hoteliers is shifting. As occupancy concerns diminish, there is a growing emphasis on maximizing average daily rates and revenue per available room. This strategic shift suggests that hotels might opt for maintaining lower occupancy levels to control availability and, in turn, charge higher rates.

Another factor influencing this trend is the operational cost of hotels in today’s high inflation environment. BCD Travel notes that with fewer guests, hotels can effectively reduce operating expenses, including housekeeping services. This cost-saving measure is an important consideration for hoteliers managing their profitability.

Jorge Cruz, BCD Travel’s Executive Vice President of Global Sales & Marketing, points out the impact of these changes on business travel. He states, “Hotels have become increasingly adept at revenue and yield management, leading to challenges for business travelers in securing rooms at preferred rates.” He emphasizes the importance of travel buyers negotiating not just favorable rates, but also ensuring the availability of these rates to avoid paying higher market prices, which will be particularly crucial in 2024.

This forecast from BCD Travel sheds light on the evolving landscape of the hospitality industry, indicating that travelers, especially those traveling for business, may need to prepare for higher hotel costs in the coming year. This trend underscores the need for strategic planning and negotiation in travel procurement to manage the rising costs of hotel stays.