A report by CWT Meetings & Events reports a one-two punch of higher hotel rates and airfares in 2018.
Higher hotel rates and airfare prices are forecast for the remainder of this year, according to the 2018 Meetings & Events Future Trends report released by CWT.
The report predicts an increase of 3.7 percent globally in hotel prices in 2018, as well as “a progressive push from suppliers to move corporate buyers away from fixed, negotiated hotel rates and toward dynamic rate pricing. While technology can accommodate dynamic rates, historically the rates have not proven advantageous for buyers. As the industry moves toward a 15 to 20 percent discount off published rates, a blended program that offers both fixed and dynamic rates with maximum thresholds in low-volume markets may work for both suppliers and buyers.”
The report addressed how, with the mega Marriott/Starwood merger, most planners are now likely to be working with a single contact across all of the combined hotels, but adds that “speculation is growing about how long mega hoteliers will operate with numerous brands to market and support rather than simply combining operations.”
It’s the same story with airfare costs, with the report predicting a price increase of 3.5 percent. “Airline prices are expected to rise along with oil prices in 2018,” the report states. “Oil prices hovered below $50 per barrel in 2017 after bottoming out in early 2016 at $29. How an airline is affected by fuel prices depends on its hedging contracts. Some carriers hedged and paid greater than market pricing in recent years, while others benefitted from little to no hedging.”