North America will continue to lead the world in hotel price increases in 2016, according to the newly released 2016 Meetings and Events Forecast
from Carlson Wagonlit Travel Meetings & Events, because of continued growth in group and transient demand that exceeds new supply. The forecast calls for a 4.3 percent rise in North American rates next year, followed by a 3.7 percent increase in Latin America and the Caribbean, and 3 percent growth in the Asia Pacific region. The projected global average rate increase is 2.5 percent, with Eastern Europe hotel costs predicted to rise by 2 percent and Western Europe remaining nearly flat at 0.7 percent growth.
In high-demand markets, notes CWT, several trends are occurring. Among them, flexibility is being reduced or removed in clauses regarding cancellation and attrition, both for rooms and F&B; the ability to resell unused rooms is likewise being limited, and hotels are becoming less likely to hold space when responding to availability requests. Going in with date flexibility and booking with more lead time both are becoming more crucial for meeting planners.
While North America should continue to remain a seller's market, buyers are gaining more leverage in Europe. Economic challenges in Latin America, particularly in Brazil and Argentina, have slowed growth in that region, although meeting space might be at a premium in Brazil next year as the country is hosting the Rio Olympic Games. In the Asia Pacific region, the unpredictable economy might present challenges, noted CWT, but even with reduced economic growth in China, strong demand there and in India account for significant projected increases for the Asia Pacific region, with group sizes expected to grow by 11 percent and the cost per attendee, per day, predicted to grow by 5 percent.
For more details, as well as recommendations from CWT Meeting & Events, see the full report here