Where will hotel room rates rise the most in 2024? Report sheds some light

However, since the Amex study calculates rate increases in local currency, the rising prices in Buenos Aires are still likely to translate to deep savings for most people visiting from abroad.

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Mumbai has a more straightforward narrative. Its hotel rooms are expected to rise in cost by 15 per cent year on year, which is undoubtedly a product of fast-growing domestic wealth and a long-delayed post-Covid-19 pandemic travel recovery.

Given both those factors apply countrywide, it’s no surprise that two other Indian cities are in the report’s top 10: Chennai and New Delhi rank fourth and seventh, respectively.

Rounding out the top 10 are cities where tourism has been booming. Whereas Cairo in Egypt has benefited from largely leisure-driven travel, Chicago, Paris and Boston rank in the top 10 thanks to gains in business travel.

In China, Shanghai is forecast to see the highest rise in room rates (8.4 per cent) followed by Guangzhou (7 per cent), Chongqing (6.3 per cent), Shenzhen (6.1 per cent), Beijing (4.9 per cent) and Hong Kong (1.9 per cent; the lowest of all 19 surveyed Asian cities).

The region with the most moderate rate increases is Australasia, where no single city is projected to see increases greater than 6.8 per cent.

Prices are expected to rise at least somewhat in all the cities examined in the report.

David Reimer, executive vice-president of global clients at Amex GBT, sees several macro trends continuing to influence hotel pricing at a global level.

Staffing shortages continue to be a problem in the hospitality industry, forcing some hotels to limit inventory – meaning they’re leaving rooms deliberately unsold – as a coping mechanism.

That spreads soaring operating costs among fewer customers.

Then there’s the issue of supply – the number of hotel rooms in any market – not keeping up with the demand.

“Where there is lagging supply but demand remains high, rates will also rise,” Reimer says.

The inverse can also be true. Rates are predicted to rise only moderately in cities such as Riyadh in Saudi Arabia and New York, which will add a large number of new hotel rooms in the coming year.

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Boston, on the other hand, has few new hotels in the works – which will be problematic for consumers as the city continues to show strong growth as a business travel hub, in addition to its perennial leisure and university-related travel demand. That explains the city’s 11.3 per cent projected spike.

“Although there’s been a lot of talk with respect to the continuation of remote work, we’re seeing some kinds of business travel actually surpassing 2019 levels,” Reimer says.

Specifically, it’s people travelling for trade shows or small internal meetings of 20 people or fewer, he says.

At some companies, he adds, trips related to those more intimate corporate functions have surpassed 2019 levels by as much as 25 per cent. “We think that will continue to be our fastest growing segment,” Reimer says.

Of course, even with the projected hotel rate increases, some of these cities still offer deep value.

A room at an over-the-top hotel in Buenos Aires during peak season, for example, can cost US$600 a night; a 17.5 per cent increase would add just a little over US$100.

Compare that with US$2,000 a night in Paris during high season – the current going rate at a palace hotel – and the smaller seeming 11 per cent increase, or around US$200, there adds twice as much sting in absolute terms.

Here are the top 10 cities where hotel prices are set to rise most dramatically year on year – along with how much more you can expect to pay in local currency.

10. Jakarta, Indonesia: 10.9 per cent

9. Paris, France: 11 per cent

8. Boston, US: 11.3 per cent

7. Delhi, India: 12 per cent

6. Chicago, US: 12.6 per cent

5. Bogotá, Colombia: 14.1 per cent

4. Chennai, India: 14.6 per cent

3. Cairo, Egypt: 14.6 per cent

2. Mumbai, India: 15 per cent

1. Buenos Aires, Argentina: 17.5 per cent

Additional reporting by Staff Reporter