Hotel rates set to jump in 2023 due to growing meeting demand

Here are some excerpts from Daily Lodging Report of the past week. If you’re not a subscriber, you should be. Get updates on hotel deals, development, inventory and career changes. register here.

Sunday, October 2, 2022

A new American Express Worldwide Business Travel Report suggests hotel rates worldwide will rise again in 2023 thanks to pent-up demand for in-person meetings. They expect the rate of increase to be lower than in 2022 due to the economic climate. The report highlights the rise in hotel rates due to inflation and the challenge of increased demand from business and leisure. The report also flags hotels’ efforts to recoup lost revenue from the pandemic exacerbated by rising labor costs, the combination of which will be difficult for corporate hotel program managers, with some already struggling. hard to get accommodations and discounted rates.

Remark : American companies were already planning to cut their business travel budgets due to inflation.

Monday, October 3, 2022

Indian hotels and other hotel companies in India said they were eyeing price increases. IHCL recently backtracked on this, saying price increases will have to wait until November. IHCL’s CEO thinks they have to wait and see if the Q3 momentum will carry over into the holiday season and push rates higher in the final two months of the year. They are convinced that as long as demand continues to exceed supply, hotels will continue to have strong pricing power, especially in large metropolitan areas.

Marriott International announced that it had signed an agreement with Suzhou Jingyuan Hotel Management Co Ltd will introduce the AC Hotels by Marriott brand to Greater China. Scheduled to open in December 2022, the 135-room AC Hotels by Marriott Suzhou will be located in the heart of Suzhou. The hotel will feature a mix of dining options, including the brand’s AC Kitchen and AC Lounge & Bar. The hotel will also offer flexible spaces, including an AC Store, 24-hour fitness center, meeting room and laundry facilities. Marriott International currently operates 15 hotels of eight brands in Suzhou.

Naya Houses secured $5 million in funding to expand its vacation and short-term rental platform in Mexico. Naya began operations in Puerto Vallarta in August and said with the funding, they will launch in Mexico City with a 15-unit building at Polanco in September. The funding round was led by Flybridge Capital Partners with participation from Primary Venture Partners, Clocktower Technology Ventures, K50 Ventures, Carao Ventures, Trip Ventures, Colibri Equity Ventures, Derive Ventures as well as several former executives from the Latin America unit of ‘Uber. Naya Homes has two former Uber staffers on the founding team.

Remark : Mexico City has attracted a growing number of American telecommuters, which threatens to increase its already large wage gap.

Tuesday, October 4, 2022

Marriott International announced the signing of an agreement with Yuexiu Property to bring its Ritz-Carlton brand to downtown wuhan china. The hotel is expected to open in late 2024. The Ritz-Carlton in Wuhan is expected to occupy the upper levels of the T5 Grand A office tower of the Yuexiu Global Financial Center, a 330-meter high skyscraper in the traditional city center from Hankou to Wuhan. The hotel lobby, ballroom, meeting rooms and some F&B facilities will be housed in three other lower levels of the same building. Rooms are expected to have a panoramic view of the urban city, close to Xinhua Stadium and Zhongshan Park as well as the Yangtze River. The hotel is expected to feature 205 rooms and suites and four distinct dining venues, including a lobby lounge. Plans also call for an anticipated Club Lounge, a signature Ritz-Carlton spa with a fitness center and pool, and a total of 1,130 square meters of event space, including a 680 square meter ballroom.

Almost all hotels are experiencing staff shortagesaccording to a survey of new members conducted by the American Hotel and Lodging Association. 87% of survey respondents indicated that they were experiencing staffing shortages, 36% of them severely. The most critical staffing need is housekeeping, with 43% ranking it as their biggest challenge. These figures are slightly better than in May. Hotels are offering potential recruits a slew of incentives to fill vacancies, such as: higher salaries, greater flexibility with home and extended benefits, but 91% say they are still not in able to fill vacant positions. According to the U.S. Bureau of Labor Statistics, as of August, employment in hospitality was down nearly 400,000 jobs from February 2020. Hotels are looking to fill many of the jobs lost during the pandemic, including more than 115,000 hotel jobs currently open across the nation. These staffing challenges translate into historic career opportunities for hotel employees. National average hotel wages from 2022 through June are over $22 per hour, higher than any other year on record.

Remark : Ongoing staff shortages have forced hotels to devise new methods of attracting workers.

Wednesday, October 5, 2022

Pebblebrook Hotel Trust announced that several of the Company’s resorts have been affected by Hurricane Ian, however, the Company does not expect the costs to repair and repair storm damage to be significant. The 189 rooms LaPlaya Beach Resort & Club in Naples, Florida will remain closed while the Company completes a full review and damage assessment of the condition of the property, which contains four buildings, two of which are on the Gulf of Mexico. The Company and its operator, Noble House Hotels and Resorts, are already working diligently to assess the property and its systems. The 119-room hostel on Fifth, also in Naples, Florida, reopened on October 1, 2022. The Company’s remaining five hotels and resorts in Hurricane Ian-affected South Florida and Georgia are open and operational. The Company estimates that the cost of repairing property damage to any of these properties will not be material.

Hilton Grand Vacations announced the grand opening ceremony of The seaside resort of Sesokoa Hilton Club, the second Hilton Grand Vacations resort to open in Japan. The resort is located on Sesoko Island, a remote island off the west coast of Okinawa. The Grand Opening Ceremony takes place a year after the resort opened to owners and guests. Hilton Grand Vacations now has a significant sales base in Japan with nearly 70,000 owners in the country. The property showcases a modern twist on Okinawa’s rich heritage and is located near Naha Airport. All 140 rooms, including studios, one-, two-, and three-bedroom suites, offer ocean views, private balconies, and come equipped with full kitchens and washer/dryers in the unit.

Remark : The opening of the new resort comes just before Japan restores visa-free entry for independent travelers from October 11.

Thursday, October 6, 2022

The Economic Times reported the return of “fat weddings” in India. The article referred to huge pent-up demand after two years of Covid-induced lockdown and curbs leading to the resurgence of big, big Indian wedding festivities. The Fairmont Hotel in Jaipur, for example, is nearly sold out from late October to February due to the influx of weddings, reporting bookings from all over India. Rates are up 35% from pre-Covid days. Lemon Tree Hotels said they expected the best wedding season for the industry in many years.

Marriott International, Inc. announced its intention to launch the Fairfield by Marriott Brand in Europe and the Middle East by the end of 2023. Planned openings in Europe and the Middle East include: Fairfield by Marriott Copenhagen North Harbour, Denmark is expected to open in Q3 2023 with 234 rooms. The 175-room Fairfield by Marriott Amsterdam Schiphol Airport, the Netherlands, is scheduled to open in the third quarter of 2023. The 123-room Fairfield by Marriott Zug, Switzerland, is scheduled to open in the second quarter of 2020. In the fourth quarter of 2024, the Fairfield by Marriott Bordeaux Gare, France is set to open with 191 rooms. Fairfield by Marriott Makkah Al Naseem, Saudi Arabia is scheduled to open in Q1 2025 with 2,600 rooms and Fairfield by Marriott Makkah Ibrahim Al Khalil road, Saudi Arabia is scheduled to open in Q4 2025 as the second Fairfield property to Mecca.

Remark : Saudi Arabia is the Middle Eastern country with the highest number of projects in the hotel construction pipeline.

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