New York City was the major US city with the highest percentage increase in its average nightly hotel rate between Q3 2009 and Q3 2010, according to new data from American Express Business Travel Monitor. In Q3 2010, an average night at a New York hotel cost $348, up 10% from $318 a year earlier.
Not only does a night at a New York hotel cost more than twice the $145 cost of an average night in a New Orleans, LA hotel, the rate of increase is also double the 5% increase in New Orleans hotel rates ($138 in Q3 2009). Washington, DC also saw its average hotel rate rise 5%, from $249 in Q3 2009 to $262 in Q3 2010.
Las Vegas, NV and San Francisco, CA both had 4% average hotel rate increases, although the average night in a San Francisco hotel in Q3 2010 ($216) cost about 75% than an average night in a Las Vegas hotel room ($124).
Domestic Hotel Rates Slightly Climb, Internatl Rates Slip
Hotel rates appear to be on a slight rise domestically in the US, growing 3% year-over-year from $144 to $148 in Q3 2010. This follows a 2% year-over-year drop from $147 to $144 in Q3 2009. American Express analysis indicates an increase in hotel closures and a drop-off in the hotel construction pipeline due to the Great Recession will put some constraints on capacity moving forward. American Express Global Advisory Services has already seen an average increase of more than 7% in corporate rates worldwide this year for 2011 business travelers.
Interestingly, international hotel rates have been on the decline for the past few years. The cost of an average night in an international hotel fell incrementally year-over-year from $239 to $238 in Q3 2010. In Q3 2009, it fell a significant 10% from $266 in Q3 2008.
Domestic Airline Rates Rise 6% YOY
With airlines exerting greater control over prices, business travelers have seen a third quarter year-over-year increase 6% in average North American domestic airfare paid ($215 to $228), and a third quarter year-over-year increase of 8% in average international airfare paid ($1,638 to $1,731).
Domestic and international airfare rates are both rebounding this year after falling between Q3 2008 and Q3 2009. Domestic airfare fell 15% from $253, while international airfare fell 18.5% from $2,010.
Business Airfare, Hotel Rates Seen Rising
Airfare and hotel rates for business travelers are expected to rise as much as 10% in key global markets during 2011, according to the October 2010 American Express Global Business Travel Forecast. Based on continued economic growth, increased demand, and constrained capacity, American Express expects airfare and hotel rates to grow up to 10% in 2011, effectively bringing prices back to pre-recession levels. Asia is expected to lead pricing increases up to 10%, with established Western economies seeing less pricing expansion up to 6%.