As hotel rates rise, the cost of business travel is on the way up.
Key Details
- Hotel costs are experiencing a shift in the market as demand and labor costs change rapidly, resulting in rising room rates.
- Lodging rates are expected to rise globally due to higher demand for in person meetings.
- Meeting and event planners will have to weigh several factors to ensure booking the most cost-effective hotel stay.
Why it’s news
As hotel rates continue to rise, those traveling for business will have more difficulty finding accommodations.
Often, hotel rates are driven by demand. When booking a hotel room, travelers should consider factors like events happening in the area and the time of year. Popular destinations during popular seasons will be more expensive.
When attempting to establish hotel blocks for conferences, some planners will have difficulty finding what they need due to the higher demand. In return, businesses may have fewer attendees as many will not travel unless accommodations are accounted for.
Travelers shouldn’t expect a dramatic drop in hotel fares anytime soon. They’re only expected to go up.
In addition to a shifting demand and rising inflation around the world, another factor driving high prices is a labor shortage in the hospitality industry.
Around 87% of hotels surveyed by the American Hotel & Lodging Association (AHLA) report ongoing staffing shortages at their locations. Of those hotels, 36% say that their staffing shortage is “severe.” The greatest shortage is among housekeepers.
Without adequate housekeeping staff, hotels are not able to offer as many rooms to potential customers as they once were. AHLA found that many of their respondents are trying to fill at least 10 vacant positions per location.
While hotels are struggling to find employees, current employees are enjoying a pay boost thanks to greater negotiation power. Average wages for hotel employees are over $22 an hour.
Though hotel employees are undoubtedly enjoying higher wages and increased benefits, the costs will likely be passed along to hotel guests.
