According to a recent study, prices are tipped to rise in the booming global hotel industry in 2020, though any such rises should be modest in nature and will vary from region to region, with political tensions and economic factors playing their role.
Hotel industry specialists are predicting modest price rises next year. Published by American Express Global Business Travel in August, the Hotel Monitor 2020 report states that while the industry will remain buoyant globally, regional issues are likely to impact on growth.
“A global boom in hotel construction is increasing the supply of guest rooms just as international trade tensions put a dampener on demand,” according to the report’s authors, explains the website TourMag. In North America, the construction of new hotels and the boom in vacation rentals should lead to a slight increase in prices.
“Chicago, San Francisco and Toronto will see the biggest increase in room rates (5%, 4% and 4% respectively),” explained the report. “In contrast, guestroom rates for New York are expected to decrease by 3% as 29,000 new rooms become available over the coming months.”
Projects on hold
The political instability afflicting countries elsewhere in the Americas has already resulted in an annual fall of 25% in hotel construction projects. But customer demand remains high and rates can be expected to rise in Central and South America next year.
Europe’s main business cities will see only small room rate rises due to continuing uncertainty about Brexit. In contrast, sustained demand in Asia means rates are likely to increase there in 2020, with experts forecasting rises of 4% and 5% for Tokyo and Bangalore respectively.
Dubai bucking the trend
In Africa and the Middle East meanwhile, there are no shortage of rooms, with the number of new hotels being built growing fast. Demand has failed to keep pace with this increasing supply, however, not least in Doha and Riyadh, where the report predicts drops in room rates of 10% and 8%. Dubai should see slight price rises, however, thanks to Expo 2020 and the visitor numbers the event is expected to attract.
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