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Hotel Monitor 2019 Powered by Global Business Consulting
Global Business
Consulting
WELCOME TO THE
HOTEL MONITOR 2019
WHO WE ARE This report is produced by the Global
Business Consulting team at American
Express Global Business Travel. It is the
American Express Global Business Travel and expense (T&E)
first of a series designed by our
Travel (GBT) is the world’s leading management:
consultants and analysts to help you
business partner for travel. The Global Analyzing and benchmarking clients’ optimize your travel policy and program.
Business Consulting (GBC) team at GBT T&E processes. Managing T&E projects With the accommodation request for
works with companies and organizations related to online booking tools, expense proposal (RFP) season almost upon us,
to help them create travel programs environments, card payment solutions, we begin to identify the particular focus
tailored to achieve specific goals. Our integration between client systems and areas you need to be aware of, while
extensive capabilities and results- American Express GBT systems. providing high-level data points to help
oriented approach allow us to build and Optimizing the T&E environment based drive your discussions. Our consulting
implement strategies that can help on agreed KPIs, supporting clients with teams are available should you require a
streamline processes, deliver savings, maintenance of T&E tools. personalized or in-depth analysis. Future
improve compliance and reduce risk.
editions of The Monitor will explore other
BI (business intelligence) and areas of travel spend in the air and
We base our approach around six
benchmarking: ground transport segments.
strategic consulting solutions that help
clients implement a best-in-class travel Providing differentiated insight and While the International Monetary Fund
management program: actionable recommendations. (IMF) expects steady growth to continue
Analyzing client travel data and globally in 2019, underpinned by several
Sourcing – air, accommodation, performance using GBC’s proprietary factors from expansionary fiscal policy
ground transport: analytics, American Express GBT’s rich in the US to partial recovery in
Targeted analytics to evaluate your supply of benchmarking data, and commodity prices, The Hotel Monitor
travel program with KPI (key powerful BI and visualization tools. 2019 shows conditions vary markedly
performance indicator) reviews of your across regions, countries and cities. At a
supplier contract management, city level, our subject-matter experts
Outsourcing:
travel spend, traveler behaviors, drill down into local conditions impacting
compliance and more. Travel management outsourcing,
pricing in the immediate areas.
including operational management of all
travel services, analyzing traveler
Change management: The Hotel Monitor 2019 is published
behavior and driving policy compliance
alongside a price forecast for 150 key
Advising on strategy, predictive analysis and best booking practices. Savings
cities around the world, and a white
of impacts linked to expected changes, management outsourcing, including
paper advising on smarter hotel buying
communication, program design and piloting savings plans through
strategies. We have collated these
training plans. Piloting implementation optimization levers and deploying new
resources to help you make informed
of change programs, including efficiency opportunities and initiatives.
decisions and better leverage your
organization, technology and processes.
accommodation spend.
For more information, visit: There isn’t space here to give local
Program and process optimization,
amexglobalbusinesstravel.com/ analysis on all the destinations where
policy design and review:
solutions-services/ our clients do business, so for strategic
Assessment and benchmarking of global-business-consulting/ advice configured for your program,
deployed end-to-end travel processes,
please get in touch with our Global
including mission order, booking,
Business Consulting team.
validation process and accounting
interface. Project management and
Joakim Johansson
integration support when implementing
Vice President,
new technology solutions, such as single
Global Business Consulting
sign-on and HR feeds.
2 AMERICAN EXPRESS GLOBAL BUSINESS TRAVEL HOTEL MONITOR REPORT 3
Key 2019 City Hotel
Rate Predictions
London 0%
Seattle +5%
Rome +2%
New York +3%
Tokyo +3%
Atlanta +4%
Shanghai 0%
Dubai -2%
Mexico City +3%
Bogotá 0% Bangkok +2%
Sao Paulo +6%
Santiago -1% Johannesburg +5%
Sydney +4%
Note: All forecasts are in local currencies
4 AMERICAN EXPRESS GLOBAL BUSINESS TRAVEL HOTEL MONITOR REPORT 5
Trends &
Analytics
HOTEL PROGRAM INSIGHTS FROM INDUSTRY RESEARCH Reading the signs...
Our Global Business Consulting team
American Express GBT regularly travel management company (TMC) analyzes what booking trends mean for you
conducts research with travel buyers offers the best content for your
and travelers and recently produced program objectives and travelers. Less luxury? Our data shows a large
the Traveler 360⁰ report, which polled proportion of APAC and Middle East hotel
2,000 travelers across seven countries: Safety: 86%-94% of surveyed travelers bookings in the luxury segment, particularly
UK, US, France, Germany, Australia, across the seven countries said staying by financial and professional services. Are
Singapore and India. It provides in a safer location is a ‘good’ reason to travel policy decision-makers unconvinced
valuable insights into travelers’ book out of policy – if travelers feel they that midscale properties in these regions are
behavior and their perceptions of need to make rogue bookings to stay adequate for business purposes? If so, there is
company travel policies and programs. safe, your policy needs to be evaluated an opportunity here to make savings because
It identifies key areas of opportunity for – as does your communications the availability of quality midscale content
hotel program improvement. strategy... suited to business travel needs is increasing.
Familiarity breeds compliance: across ...Is there a disconnect between you Independent thinking: The choice of
the polled countries, travelers who were and your travelers? The Traveler 360⁰ independent hotels available within the TMC
very familiar with their policies were survey also found that less than half of booking environment is increasing, and travel
twice as likely to be consistently respondents believed employers always buyers should consider their potential value.
compliant than those who were only had their safety in mind when traveling But also note that ‘independent’ properties
somewhat familiar with their policy. for business. Assuming most employers can signify varied price points in different
But that policy needs to be clear. In are conscientious about duty of care locations, so deeper local analysis is needed
most countries, roughly half of obligations, these figures reveal a need for effective cost management.
travelers said their companies’ for better traveler engagement,
policies are not clear. communications and education. Energy savvy: We see greater usage of
independent properties by the oil and gas
Travelers gave what they believed to Loyalty schemes: travelers also cited sector. Energy companies have had to
be ‘good reasons’ for going rogue: earning rewards points as a good reason operate agile travel policies that can quickly
high percentages of travelers cited to book outside policy (65%-92%). While adapt to volatile trading conditions. Drastic
staying near clients or meetings hotel loyalty schemes are a powerful oil price falls bring demands for severe
(84-94%) and staying in more draw, they can benefit your travel cost-saving targets – but always coupled
convenient locations (85-96%) as program, if managed well. Look at with stringent duty of care requirements.
reasons for booking out-of-policy incentivizing travelers to book preferred This sector could provide examples of best
hotels. Our research found location is partner brands that provide benefits practice for travel managers in other sectors.
the prime factor when travelers search that improve their experience.
and book hotels. Quality is another Oil city nuances: The average cost of a hotel
driver: 71%-96% of mavericks reckon Saving money: another excuse for room in Aberdeen, Doha and Lagos is still
going off policy to find a better hotel is off-piste bookings is the traveler’s belief 70% less than it was in January 2012, but
acceptable. To tackle these ‘reasons’, that finding a bargain will save the Aberdeen is the only city where this was
content is crucial. company money (85%-92%). Again, obviously the result of the oil price collapse in
education and awareness will drive 2014. Steadier ADR (average daily rate)
Choice, but the right choice: further compliance: with corporate negotiated decline in Lagos and Doha may reflect other
research – GBT’s Modern Business rates plus a TMC with exclusive hotel factors, including oversupply in Qatar – plus
Traveler study, developed in partners, booking in policy nearly its ongoing embargo crisis – and an easing of
conjunction with the Association of always offers the best value – and can US export restrictions on liquefied natural
Corporate Travel Executives (ACTE) include added amenities that make the gas (LNG) affecting market share for Nigeria
– finds travel managers wanting a traveler’s stay a better experience. and Qatar. Houston has stayed robust,
wider choice of content: 38% said a benefiting from the shale revolution that
program suffers when travelers don’t caused the oil price collapse in the first place.
have enough access to content. But Generally, global energy market changes
they are also wary of the ‘retail booking mean buyers should be prepared to see oil
experience’: 56% believed hotel groups For in-depth expert advice on and gas city rates eventually start to rise.
marketing directly to travelers could smarter program strategies,
weaken compliance. Make sure your download your white paper here
6 AMERICAN EXPRESS GLOBAL BUSINESS TRAVEL HOTEL MONITOR REPORT 7
‘‘
KEY CITIES
Europe
Increased trade Dublin 7% Brussels 3%
combined with lower Dublin ADR continues to increase. The city is well connected to
Brexit may lead to an increase of Paris and other big cities in the EU.
unemployment business travel and tourism from The EU Parliament, the European
should contribute the EU. An increase in hotel rooms is Court and many large corporates drive
forecast to be minimal at best, the local economy. Demand often
to an increase in meaning ADR will continue to increase outstrips supply. Limits on building
travelers and stronger over the medium and longer term. new hotels mean ADR should
continue to rise.
demand for lodging
London 0% to drive demand for hotels, while Rome 2%
Germany’s largest airport is located
Following a 10-year high Brexit may well have some impact The Italian capital enjoys strong
very close to the city center. However,
in 2017, Europe is on business travel into London, more demand from Europe and the US, with
longer-term price stability could be
expected to see GDP so than other cities in the UK. additional demand from APAC and the
hoped for as Frankfurt has one of
growth slip back to 2.0% in Inbound tourism from other regions, Middle East. GDP growth for the near
Europe’s largest hotel pipelines. 2
2019. Aside from Ireland, growth particularly Asia and the US, will keep future appears to be relatively stable at
is likely to be strongest in ADR steady, but London will potentially 0.9-1.1%. Following strong RevPAR
Eastern Europe. 1 see less international and EU travel in Madrid 3% recovery in 2015, Rome’s performance
2019. Domestic travel and annual remained relatively flat in 2016 and
Madrid, the financial, economic and
Increased trade combined with events and conferences should keep political center of Spain, is traditionally
2017, with little change in occupancy DOWNLOAD THE FULL
lower unemployment should London hotels relatively busy. recognized for its strong corporate
and average rates.7 CITY FORECAST HERE
contribute to an increase in business, including companies based
travelers (corporate and leisure) in the financial district to the north of
and stronger demand for Stockholm 2% the city. The Economist Intelligence
lodging. Not surprisingly, Hotels in Stockholm continue to be Unit (EIU) forecasts real GDP growth of
demand growth continues to extremely busy mid-week, with many 2.7% in 2018 and a reasonable average
outpace the creation of new hotels operating a minimum-night-stay growth of 2.1% thereafter. 5
supply in most markets.
However, construction pipelines
booking policy. There is minimal new Europe 2019 national hotel rate forecasts
inventory planned in downtown
have been strong in London and Stockholm in 2019, so we do not Amsterdam 3% -2% 0 +2% +4% +6% +8%
in major German cities expect change anytime soon. Amsterdam enjoys high occupancy
(Frankfurt, Berlin and Munich). 2
levels. Recent measures to restrict the Belgium 3%
Limited supply growth in building of new hotels will likely push
most European markets
Paris 6% ADR up.6 The Dutch city continues to Denmark 2%
combined with steady demand Paris enjoys a healthy blend of benefit from increased tourism from
growth helped boost occupancy business and leisure travel, which the Asia-Pacific region and US. Finland 2%
and room rates in 2017, and continues to drive strong ADR.4 Access to the city has improved via
there is little indication this will Paris has remained, alongside London, the direct connection between Paris France 4%
change for most of Europe in as one of the two most desirable CDG-Amsterdam Schiphol and the
the next few years. cities for private investment for more announcement of a faster connection Germany 2%
than a decade. It is worth noting the via Eurostar.
The UK’s GDP grew by just 0.1% French government has set an Greece 3%
in the first quarter of 2018 ambitious target to reach 100 million
compared to the previous three tourists in France by 2020. To help Munich 2% Ireland 6%
months, representing the meet its goal, it is investing to Munich is home to many global
weakest expansion in more than accelerate visa processing and brands, including several from the Netherlands 2%
five years. The GDP growth reduce waiting times at airport automotive industry. It benefits from a
projection for 2019 has fallen passport controls. strong leisure sector and events such Norway 3%
to 1.5%. 3 Elsewhere, the as the annual Oktoberfest, which
uncertainty surrounding the attracts meetings business. Demand Poland 1%
UK’s exit from the European Frankfurt 2% continues to grow while the
Union – scheduled for March A key and influential city for the finance opportunity to build new hotels Spain 3%
2019 – remains a concern for sector. Uncertainty over Brexit and the continues to be a challenge across
the business community. impact on the London finance district Munich, meaning future ADR should Sweden 2%
could lead to an increase in demand for continue to rise.
hotel rooms in 2019 and beyond. Switzerland 2%
Frankfurt hosts many large business
conferences and events, which continue United Kingdom 1%
Source: Global Business Travel Forecast 2019 from American Express Global Business Travel (GBT).
Note: All forecasts are in local currencies
8 AMERICAN EXPRESS GLOBAL BUSINESS TRAVEL HOTEL MONITOR REPORT 9
KEY CITIES North America 2019 national hotel rate forecasts
North America Canada
-2% 0 +2% +4% +6% +8%
4%
United States 3%
New York 3% San Francisco 4% Source: Global Business Travel Forecast 2019 from American Express Global Business Travel (GBT).
Note: All forecasts are in local currencies
The United States Despite a strong supply pipeline into Strong rate growth is expected to
continues to perform 2019, occupancy is expected to remain continue in San Francisco. Occupancy
strongly, with GDP set to in the mid-80% range. Large-scale levels remain high at more than 80%,
grow 2.9% in 2018 and 2.8% in developments in the Manhattan combined with consistently strong
2019. 8 However, concerns submarket continue to fuel demand. leisure travel. As Silicon Valley
remain that some US policies The resurgence of Downtown with the continues to grow, so does demand for
have led to a reduced number of redevelopment of the World Trade hotels in San Francisco. Demand is also
foreign inbound travelers, while Center complex has seen a number of predicted to increase due to the Houston 1% Seattle 5% Vancouver 3%
changes to NAFTA and trade new hotel properties open in FiDi, enlarged Moscone Center, which is
Houston continues to recover from Seattle is among the fastest-growing Overall rate increases have been the
tariffs could have further impact. TriBeCa and SoHo over the past year.12 scheduled to open in January 2019. The
Hurricane Harvey. The medical and cities in the US, and commercial norm during 2018 and this will
International arrivals to the As more corporates move into the supply pipeline is made up of a variety of
energy sectors have shown signs of developments in the area have continue into 2019. One factor has been
US were down 4% in the first redeveloped WTC area, demand is hotels at different price points, ranging
growth. Issues around supply following fueled unprecedented hotel demand the number of hotel closures versus new
three quarters of 2017, while increasing, which will drive rates from pod hotels and three-star
the natural disaster are easing. Many growth along with a strong pipeline hotel openings, meaning a slight
worldwide international arrivals upwards – however, buyers may be able properties to five-star boutique hotels.
venues and hotels are either reopening of new properties. Seattle is a diverse reduction in bed stock. Convention
in 2017 increased by 7%.9 to find cost-savings elsewhere in the
or planning to reopen soon. high-tech economy rooted in business has increased by 92%, with six
city. Developers are exploring new areas
manufacturing, biotechnology, low-season conventions contributing
Room construction fell by 2.2% for hotel development opportunities, Washington, D.C. 2% telecoms and IT, health care and towards the overall increase in business
when comparing April 2018 to and as new inventory comes online,
April 2017, with the number of
The overall outlook for DC hoteliers is Los Angeles 3% tourism. Metro Seattle, especially travel.
discounted rates should be available.
good: the federal government continues Downtown LA has registered seven Downtown Seattle and Bellevue, is
hotel rooms under construction
to be a significant demand generator consecutive years of RevPAR increases. experiencing a period of exponential
in the US declining in six of the
seven preceding months. 10 Chicago 6% for hotel rooms, and it drives the This will continue through 2018 growth anchored by tech giants such as Toronto 7%
local economy. Transient business and beyond. Historically, the Downtown Amazon, Microsoft, Google and Toronto is the fifth-largest city in North
Chicago occupancy levels have reached travel and conferences and events will Expedia. These and other key
According to TravelClick’s LA market has been driven by America and the largest in Canada.
record levels, with average rates help ADR growth for operators and employers in the area, including the
North American Hospitality corporate and meetings demand. Tourism in Toronto is booming,
during the peak months higher than ensure average rates will continue to Bill & Melinda Gates Foundation and
Review, hoteliers reported But leisure demand is also expanding. leading to an ever-increasing hotel
ever before. This shows no sign of increase during peak periods. The the University of Washington, strongly
positive results during Q2 2018, With entertainment complex L.A. LIVE demand. The city is the culinary and
changing throughout 2018 and 2019, overall average rate will be constrained influence the local and regional
with bookings up 1.4% and as the main catalyst along with new arts capital, with renowned art
with further demand led by increased owing to the per diem rates available to economies and lead to Seattle
ADR up 2.5% on Q2 2017. This restaurants and nightlife venues, galleries, museums, restaurants,
convention business at McCormick government employees. experiencing high increases in ADR.
was partly driven by group and more travelers are opting to stay sports venues and theatre district.
Place. Occupancy levels, ADR and
transient business travel, which Downtown while exploring other parts Toronto has a growing financial center.
RevPAR are all increasing year-on-year.
showed the strongest RevPAR of the greater Los Angeles area. This combined with the tourist
Downtown Chicago hotels will continue
gains (6.5% and 5.5%
to benefit from major corporation HQ
Atlanta 4% business means a large ratio of
respectively) across all properties within the upscale
moves into the area, including Average rates are expected to continue
segments. 11 to luxury tiers.
McDonald’s, Dyson and Walgreens. rising, meaning positive RevPAR
Tourism is booming in growth for Atlanta hotels over the next
Canada. Recently announced several years. Georgia offers tax-break
initiatives to increase Chinese Boston 5% incentives, which in turn leads to
travel to Canada in 2018 and growth in the corporate sector,
The Boston hotel marketplace continues
beyond means Vancouver and especially in media and technology in
to thrive: more than $7 billion in
Toronto will be the country’s the Atlanta area. A significant amount of
new construction in the past few years
most visited destinations by infrastructure development is underway
across the city and mass transit
Chinese tourists. This will have in Atlanta, with new expansions and
projects have contributed to its
an impact on rates. builds promising to attract more
continued strength and expansion.
tourists, commercial travelers, and
This, combined with Boston’s healthy
group demand. A good example is the
mix of corporates and strong convention
high-profile, $6 billion expansion of
market buoyed by two world-class
Hartsfield-Jackson Atlanta International
event venues, should ensure the area’s
Airport. This, and the relatively low hotel
economy is strong and will bring even
build pipeline, will mean a strong 2018
more demand for hotel rooms. DOWNLOAD THE FULL
and 2019 for the city’s hotel operators.
CITY FORECAST HERE
10 GLOBAL BUSINESS TRAVEL FORECAST 2018 HOTEL MONITOR REPORT 11
KEY CITIES Latin America 2019 national hotel rate forecasts
Latin America Argentina
-15% -10% -5% 0 +5% +10% +15% +20%
21%
Brazil 3%
Chile -1%
Buenos Aires 21%
Overall, Latin American occupancy growth and seventh Remember that inflation is expected to Colombia 2%
economies continue to straight month of ADR increases. remain high in 2018 and 2019 — it was
improve. The region April saw Brazil’s occupancy 25% in 2017 — and this is a local Ecuador 2%
should see GDP increase to levels at the highest for that currency forecast, so a different picture
2.5% in 2019 compared to 1.4% month since 2014. 13 when buying in dollars or euros. The Guatemala -1%
in 2018. Argentina, Paraguay Argentinian capital has a population of
and Uruguay are forecast to be The Mexican economy is highly more than 3 million and is the second- Mexico 3%
down due to several factors, dependent on US demand for most visited city of Latin America
including a recent drought. imports (mainly manufactured (behind Mexico City). A wide mix of Peru 2%
goods) and economic activity has industries in Buenos Aires includes food
The economic outlook is tightly decreased since 2010 mainly as a processing, motor vehicles, consumer
linked to both China, whose result of falling international durables, textiles and chemicals. Source: Global Business Travel Forecast 2019 from American Express Global Business Travel (GBT).
economy is slowing, and the US, demand for Mexican goods. The Note: All forecasts are in local currencies
where uncertainty about trade IMF predicts annual growth of 2.3%
and fiscal policies could in 2018, and of 3.0% in 2019. 14 Sao Paulo 6%
negatively impact the number
Peru is forecast to be the best Sao Paulo is the business hub for Brazil.
of travelers to Latin America.
performing economy in Latin Many of the world’s largest banks have
their Latin American headquarters in
Brazil’s emergence from a America, but there remains some Bogotá 0% Mexico City 3% Rio de Janeiro -1%
recession has meant the hotel concern about political instability. the city.15 Some economists and
strategists take the view that the In addition to being the capital, Output growth is projected for both Rio is Brazil’s financial center. With an
sector is poised to see revenue The steady rise in copper prices
Brazilian economy is growing, if only Bogotá is Colombia’s largest economic 2018 and 2019. This is due to improved estimated GDP of $305 billion, it is the
growth, particularly in Sao has made Chile’s economy one of
slightly. Carnival season is a huge center – an HQ for Colombian business conditions linked to fourth wealthiest city in Latin America.
Paulo. Political instability is the strongest and most robust in
tourist boost and there was a 7% companies and home for most foreign improvements in safety, governmental As occupancy continues to increase (up
always a concern and Latin America – Chile currently
increase in hotel occupancy at that time companies doing business in the stability and official relations with the 20.7 points in 2017) this will mean ADR
unemployment is still very high. produces more than a third of the
in 2017. There are currently 26 new country. It is also the location of US. Mexico’s hotel demand is expected will improve. Hotel brands were given a
In April 2018, Brazil recorded world’s copper.
hotels in the pipeline, which will add a Colombia’s main stock market. Bogotá to rise ahead of positive GDP growth major uplift thanks to the Olympics in
its eighth consecutive month of
further 4,700 rooms to the region. has enjoyed its highest Q1 occupancy estimates of 2.3% by the IMF. 2016, when in addition to the
levels since 2012, but ADR decreased This will be fueled by increased improvements to existing hotels, more
by 3.2% during this period. The IMF government spending, domestic than 10,000 new rooms were built to
Santiago -1% predicts 2.7% growth, but with the investment and the emergence of new meet demand. Businesses and their
recent elections and the possibility of industries, such as research and travelers continue to benefit from this,
With a population of more than
increases in the price of oil, combined development, technology and life both operationally and financially, as
5 million, Santiago is the capital of Chile
with the ongoing threat of terrorism, sciences. Security remains a challenge occupancy levels will not reach Olympic
and one of the largest cities in Latin
prices are forecast to remain the same. across Mexico.17 levels in the near future.
America. It is the cultural, political and
financial center of Chile, and home to
‘‘
the regional headquarters of many
Monterrey 5%
multinational corporations. Growth in
Chile is projected to accelerate to Monterrey is the capital and largest
around 3.6% in the coming years, city in the northeastern state of
supported by an improving external Nuevo Leon. It is the business center
outlook and favorable financial of northern Mexico and home to many
conditions. Real wages will grow as large international corporations. For
salaried employment recovers, lifting Mexico’s accommodation sector to
private consumption and reducing continue to thrive long-term, however,
public safety and security are of the
income disparities.16
utmost importance, as are much- Economic outlook is tightly linked
needed infrastructure improvements to both China, whose economy is slowing,
in water, sanitation, electricity
and transportation.
and the US, where uncertainty about trade
and fiscal policies could have impact
DOWNLOAD THE FULL
CITY FORECAST HERE
12 AMERICAN EXPRESS GLOBAL BUSINESS TRAVEL HOTEL MONITOR REPORT 13
KEY CITIES Asia Pacific 2019 national hotel rate forecasts
Asia Pacific Australia
-2% 0 +2%
2%
+4% +6% +8%
China 1%
India 2%
Ho Chi Minh 2% Indonesia 3%
Ho Chi Minh is the financial center of
Demand continues to rise region. 19 Increasing visitor numbers Japan 3%
Vietnam, and business travel into the
across the Asia-Pacific and foreign exchange rates are
area is growing rapidly. To meet the
(APAC) region, in particular among many factors that will Kazakhstan 2%
growing demand, more than 3,500
India and China. This is creating a likely result in an increase in
rooms are planned across 16 new hotels
changing travel dynamic across average room rates across most Malaysia 4%
during 2017–2019. It is worth noting that
the region, and room availability of India. 20
Vietnam is one of Southeast Asia’s
can be a challenge in popular New Zealand 9%
For the first time in a decade, fastest-growing economies in the region.
locations such as Singapore,
Hong Kong, Sydney, Tokyo occupancy levels in India have Philippines 5%
and Bangkok. reached higher than 65%, and
average room rates have grown by Melbourne 4% Singapore 1%
However, new hotel builds are 8% since 2008. Demand is
Two of the four largest banks in Australia
keeping pace with increased outstripping supply, with budget
are headquartered in Melbourne.
South Korea -1%
demand, meaning rates remain brands now moving into this
Demand continues to exceed supply,
favorable to buyers in most traditionally premium-brand space. Taiwan 3%
with occupancy levels on par with
locations. Overall, room rates
Sydney at 88%. Flight data specialist
should continue to increase Technology and mobile payment Thailand 2%
solutions in China are shaking OAG ranks the Melbourne-Sydney route
moderately through 2018,
up the hospitality sector. Examples as one of the busiest in the world. Vietnam -3%
although this will vary city by city.
of this include Marriott’s tie-up with
APAC economies are expected to Alibaba’s travel service platform and
grow by around 5.6% in 2018 and Alipay, which is aimed at elevating Sydney 4%
2019, accounting for nearly the overall online and offline travel Occupancy levels remain high despite
two-thirds of global growth. experience for Chinese consumers. Source: Global Business Travel Forecast 2019 from American Express Global Business Travel (GBT).
a 5.1% increase in supply year-on-year. Note: All forecasts are in local currencies
Buyers should be aware that Demand remains bullish, so expect
potential market corrections and a According to a report by Lodging
further increases in 2019. The Australian
shift toward protectionist policies Econometrics in June, China’s hotel
economy remains strong, conferences
create an element of risk. In construction pipeline was up 2%
and events are growing and access to
addition, concern regarding year-on-year, with nearly 2,500
rooms is often an issue due to the strong
geopolitical tensions is ongoing. 18 projects and more than 500,000 Beijing 1% Singapore 1% Hong Kong 1%
cruise sector, with Sydney often the final
guest rooms. 21 Beijing is undergoing major infra- Visitor numbers are expected to grow by A continued increase in overnight
port for many operators.
India was projected to account for structure development, with 4% in 2018 and similarly in 2019. A visitors from mainland China (more than
3.7% of global online travel sales strong focus on public and green supply shortage means average 78% of all travelers) and other Asian
in 2017, making it the third-largest transport. Business travel and meetings occupancy levels are more than 84%. markets has driven occupancy levels to
market by value in the APAC Bangalore 4% and events continue to grow, and the Disruptors such as Airbnb and serviced around 90%. Demand will be met by the
While supply grows by 8%, demand new airport due to open in 2019 will apartment providers are gaining an 30-plus hotels scheduled for completion
grows by twice that amount, meaning further support travel into the region. increased foothold. The local economy in 2018, plus a further 13 in 2019. This
occupancy will keep increasing at a rapid Strict development constraints in the performed better than expected in Q1 should ensure demand and rates are
pace. It is anticipated that the next 3-4 city center limit new supply. 2018, helped by strong manufacturing kept in check.
years will be a strong period for hotel and construction sectors.
Tokyo 3% Bangkok 2% growth. Budget brands are moving into
With Japan hosting the 2019 Rugby The recently announced Digital
the premium space to meet growing Kuala Lumpur 3%
corporate demand.24
World Cup and Tokyo the 2020 Olympic Government Plan 2017-2021 aims to Mid-2017 saw the introduction of the
Games, the Japanese capital is achieve an integrated, citizen-centric tourism tax (RM10). Prices quoted
expecting an influx of visitors. Hoteliers digital government within five years. typically exclude the tourism tax, so this
saw 2.6% RevPAR growth with supply up Tourism forms a key part of this Shanghai 0% needs to be taken into account when
4% through to the end of 2017. government strategy.22 Forecast for the Rates are not forecasted to rise in preparing your RFP. Government
Occupancy levels continue to be strong. period 2018 to 2020 is for annual growth 2019, owing to Shanghai having a initiatives are underway to promote
It is worth noting that pressure on of 8-10% in international arrivals and vast pipeline of hotel rooms due to come business, medical, education and
inventory and corporate rates created 5-7% in domestic tourism, while online. This new inventory will put sport-related tourism. Several luxury
brands are opening new properties in
DOWNLOAD THE FULL
by the Tokyo Olympics should be over the same period, occupancy rates pressure on existing corporate rates.
2018 and 2019.
CITY FORECAST HERE
factored into future travel budgets. should average 66-70%.23
14 AMERICAN EXPRESS GLOBAL BUSINESS TRAVEL HOTEL MONITOR REPORT 15KEY CITIES Tel Aviv -1% Doha -13% Johannesburg 5%
Middle East & Africa
Home to most of Israel’s large The capital of Qatar is currently facing Hotel rates are forecast to increase
corporations, such as banking, an oversupply of hotels and relatively through 2019, indicating an
insurance and finance, Greater Tel Aviv slow demand, leading to a decrease in improvement in the local economy.
has retained a reputation as a thriving, rates. Qatar’s ongoing diplomatic However, Johannesburg has only 10%
innovative, high-tech industrial center embargo crisis with neighboring states of the planned pipeline of hotels across
of substantial global significance. The continues to impact business. South Africa. A little more than 430
city has one of the highest start-up However, the hospitality sector in rooms are planned in four hotels, which
densities in the world, often referred to Qatar is expected to see annual growth could lead to pressure on rates. 31
as Silicon Wadi (Hebrew for Valley) of 10% over the next three years, in
Riyadh -4% with many of the world’s largest part due to the lifting of visa
technology companies having R&D requirements for citizens of 80 Lagos 13%
Ongoing geopolitical helping to push up growth Business travel to Saudi Arabia is centers in Tel Aviv. 29 The shekel-dollar countries. More than 20,000 rooms in
instability remains throughout projections in sub-Saharan Africa likely to grow over the next couple of Bear in mind that this local currency
exchange rate is causing concern for hotels and aparthotels are at varying
much of the Middle East and from 2.7% percent in 2017 to 3.5% years. But demand should be more forecast would look markedly
the region’s hoteliers, due to the fact stages of construction. Hospitality
Africa. Economic growth in certain percent in 2018, with further than matched by increases in supply different in USD, GBP or euro terms,
that half of the region’s revenue is in revenues are expected to peak at $1.6
parts of the region is, however, cause strengthening expected in 2019. 25 due to current high domestic inflation
‘‘
with new hotels scheduled to open in dollars while operating expenses are billion in the next three years.
for some optimism. This is based on rising business and Riyadh during this time. rates predicted to continue in 2019. A
in shekels, making managing revenues
consumer confidence as well as limited supply of hotels that meet
The combination of these dynamics a challenge. 30
reduced geopolitical tensions, a international corporate security
is helping drive demand for upscale modest rise in oil prices and more Abu Dhabi -6% requirements puts some pressure on
properties, which travelers typically diversified economic activities. business travel hotels.
perceive as offering higher levels of Tourism fees in the UAE capital have
According to the International Air
security. Accordingly, rates for these been reduced from 6% to 3.5%, while
properties are more likely to increase
Transport Association (IATA), the
municipality fees have also been Despite economic and business growth in the region,
top 10 fastest-growing aviation
compared with midscale properties economies over the next 20 years
reduced from 4% to 2%. Abu Dhabi it’s unclear whether demand can match future
is aggressively expanding its tourism
that are more focused on domestic will all be in Africa. 26
sector and further improving
supply increases – if not, expect prices to drop
and inter-regional travelers.
Across Africa, midscale hotel infrastructure to attract more
Hotel supply in the United Arab brands are showing the highest visitors. The total number of hotel
Emirates (UAE) has increased returns for investors, which appears guests was boosted by international
24.9% since 2014, while ADR and to be due to a stable local and markets, such as China, India and the
RevPAR growth have decreased regional demand base. It is US. Abu Dhabi currently has more
consistently over this time period. predicted the region will continue to than 4,000 rooms covering 12 hotel
Currently, there is pipeline potential see high levels of investor activity in projects under construction. It is
for a 45% increase in rooms in the midscale properties. expected that given Abu Dhabi’s Middle East & Africa 2019 national hotel rate forecasts
UAE, but the final number will likely oversupply, this will start to cause
be lower as projects in the earlier Generally, despite economic and hotel rates to decrease. 27
-15% -10% -5% 0 +5% +10% +15%
phases might be reduced. business growth in the region,
it is unclear whether demand can
Following a period of economic Dubai -2% Egypt 0%
match future supply increases; if
slowdown, stronger global growth not, expect prices to drop. Dubai received 15.8 million visitors Ghana 8%
and higher commodity prices are
in 2017. This figure is forecast to
increase to 20 million by 2020. Israel 0%
Dubai has also reduced its
municipality fees from 10% to 7%. Jordan 4%
This is designed to reduce the
cost of doing business in the emirate Kenya 3%
and promote Dubai as a business
and tourist destination. 28 Like Nigeria 13%
Abu Dhabi, it is expected that Dubai’s
current oversupply means Oman -2%
ADR will fall. Hotel inventory will
increase from 107,431 rooms in Qatar -13%
2017 to 132,000 by end of 2019,
according to Dubai’s Department of Saudi Arabia -4%
Tourism & Commerce Marketing.
South Africa 6%
United Arab Emirates -3%
DOWNLOAD THE FULL Source: Global Business Travel Forecast 2019 from American Express Global Business Travel (GBT).
CITY FORECAST HERE Note: All forecasts are in local currencies
16 AMERICAN EXPRESS GLOBAL BUSINESS TRAVEL HOTEL MONITOR REPORT 17Key Takeaways The
for Travel Buyers Methodology
‘‘
Optimizing your hotel program: top tips and best practices Forecasting requires a lot of good
data. We delved into our vast data lake
to understand the dynamics at a city
level in local currency terms, using
proprietary sources, including
1. Make sure you have reliable, aggregated hotel transaction data over
accurate, up-to-date spend and Looking at how others the past seven years.
usage data. have adapted to changing
business conditions and In addition to seeing what was
2. Regularly review your travel and happening in target cities based on our
expenses policy – is it still fully identifying best practices data, we factored in other variables
relevant, fit for purpose and aligned is time well spent that impact the hotel industry as a
with company objectives? whole. We augmented the data set with
Be prepared to amend it when and other macroeconomic variables
where needed, and talk to your from the IMF and broader industry
TMC about benchmarking your metrics from hotel data specialist STR.
policy performance.
Good forecasting requires us not
just to project the ‘trend’ of the data
3. Is your current pricing model for 5. It’s not always about the chains forward. That ignores a lot of ‘residual’
hotels the right one? Blending – independent hotels can offer viable variation as well as seasonal
options such as fixed and dynamic alternatives and value for money highs and lows, compromising the
rates to suit spend and usage is in many locations and should always accuracy of the forecast. The approach
good practice. be considered. we use models the ‘residual’
variation using broader industry and
4. Which suppliers are closely aligned macroeconomic variables. We included
6. What other accommodation types
to your business objectives? For only those variables with the
should you consider? Serviced
example, if a supplier is reducing its biggest impact to avoid ‘overfitting’
apartments could suit travelers who
cancellation periods, look at what of the model.
are working away for long periods of
impact this would have for your time. As well as tax benefits
travelers and your costs. (dependent on location), there are Using third-party expert forecasts of
other cost and traveler benefits. those external variables, we were able to
increase the accuracy of our ADR
(average daily rate) forecast by adding
7. Stick or twist? Think about when is our model of ‘residual’ variation.
the best time to negotiate.
September to December is very busy
as suppliers respond to often
hundreds of RFPs (request for
proposals). Consider negotiating
early in the new year instead, when
there may be new opportunities to
access good rates.
8. L
earn from other companies and
industries. Looking at how others
have adapted to changing business
conditions and identifying best
practices is time well spent. Don’t
simply copy and paste – copy, adapt
and paste.
18 AMERICAN EXPRESS GLOBAL BUSINESS TRAVEL HOTEL MONITOR REPORT 19End Notes:
American Express Global Business Travel (GBT) equips companies of all
sizes with the insights, tools and services they need to keep their travelers
Europe
informed, focused and productive while on the road. With approximately
1. ec.europa.eu
12,000 employees and operations in nearly 140 countries worldwide,
2. hotelnewsnow.com
American Express GBT empowers customers to take control of their travel
3. imf.org
programs, optimizing the return on their travel and meetings investments,
4. pwc.fr/
while, more importantly, providing extraordinary traveler care.
5. hvi.hvs.com/market/europe/Madrid
6. pwc.com
Learn more at amexglobalbusinesstravel.com
7. h
vi.hvs.com/market/europe/Rome
and at amexglobalbusinesstravel.com/content/.
Follow us at twitter.com/amexgbt.
North America
8. oecd.org
American Express Global Business Travel (GBT) is a joint venture that is not
9. reuters.com
wholly owned by American Express Company or any of its subsidiaries
10. h otelnewsnow.com
(American Express). “American Express Global Business Travel,” “American
11. hotel-online.com
Express,” and the American Express logo are trademarks of American
12. hvi.hvs.com/market/united-states/New_York
Express and are used under limited license.
Latin America
13. hotelnewsresource.coml
14. i mf.org
15. theculturetrip.com
16. oecd.org/chile
17. gov.uk
Asia Pacific
18. imf.org
19. economictimes.indiatimes.com
20. h otelnewsnow.com
21 lodgingeconometrics.com
22. o
pengovasia.com
23. k
rungsri.com
24. b
usiness-standard.com
Middle East & Africa
25. imf.org
26. fi n24.com
27. g ulfbusiness.com
28. a rabianbusiness.com
29. c ode-n.org/blog
30. g
lobes.co.il
31. fi
n24.com
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