According to a recent report from American Express Global Business Travel, hotel room rates in major cities like Buenos Aires, Mumbai, Boston, and others are expected to see double-digit increases. This surprising trend is occurring even after predictions that hotel prices were reaching their peak. The Hotel Monitor 2024 report examines fluctuations in hotel prices in over 80 cities worldwide, using factors such as current prices, broader economic trends, hotel development, and historical data to make forecasts.
Buenos Aires tops the list with a projected 17% year-over-year increase in hotel rates. This surge is mainly driven by Argentina’s ongoing hyperinflation crisis, which reached its worst levels since 1991 in September. Notably, these price increases, when calculated in the local currency, still translate to substantial savings for international travelers.
Mumbai, in second place, is expected to see a 15% year-over-year increase in hotel costs. This is attributed to the country’s growing domestic wealth and the delayed recovery in post-pandemic travel. India, with Chennai and Delhi ranking fourth and seventh, respectively, claims three cities in the top 10.
The remainder of the top 10 cities have seen a surge in tourism. Cairo benefits from leisure-driven tourism, while Chicago, Paris, and Boston’s rankings are due to increased business travel. Australasia experiences the most moderate rate increases, with no city expecting increases greater than 6.8%.
The report anticipates at least some price increases in all 80 cities it examined. The global hospitality industry continues to grapple with staffing shortages, forcing some hotels to limit their inventory, leaving rooms unsold to distribute rising operational costs among fewer customers. Additionally, supply in terms of available hotel rooms is struggling to keep up with demand, leading to rate hikes in markets where supply lags behind demand.
Boston, for example, faces a shortage of new hotels despite strong growth in business and leisure travel. Remote work discussions notwithstanding, certain types of business travel, such as trade shows and small internal meetings, have already surpassed 2019 levels. This trend is expected to continue, making it one of the fastest-growing segments.
Despite these projected rate increases, some cities still offer excellent value for travelers. For instance, a luxurious hotel room in Buenos Aires during peak season can cost just $600 a night, with a 17.5% increase adding a little over $100. In contrast, a night in Paris during high season at a palace hotel can cost $2,000, making the 11% increase, around $200, feel comparatively more substantial.
Here are the top 10 cities where hotel prices are expected to see the most significant increases, along with the corresponding local currency increase compared to the previous year:
- Jakarta, Indonesia: 10.9%
- Boston, US: 11.3%
- Paris, France: 11%
- Delhi, India: 12%
- Chicago, US: 12.6%
- Bogotá, Colombia: 14.1%
- Chennai, India: 14.6
- Cairo, Egypt: 14.6%
- Mumbai, India: 15%
- Buenos Aires, Argentina: 17.5%