Hotel rates in major global business travel cities are showing signs of moderation, according to the latest data from accommodation booking specialist HotelHub. While rates continue to climb, the increase is happening at a slower pace than in the past two years, suggesting a potential shift in the market.
During the second quarter of 2024, the average room rate across major business travel destinations reached $189 per night, representing a 3.6% increase compared to the same period in 2023. This increase is significantly lower than the 9.6% year-on-year rise observed during the corresponding period of 2023. While rates in many key business centers remain above the global average, the year-on-year increases that characterized previous years are beginning to slow down.
For instance, in New York, the average hotel rate rose by 5% year-on-year to $432 per night during Q2, a significant decrease from the 12% increase seen in the first quarter of 2024. London experienced a 7.5% year-on-year increase, with average room rates reaching $330 during the second quarter. However, cities like Stockholm, Chicago, and Paris saw only minor changes in their average room rates compared to the same period in 2023. Madrid, on the other hand, experienced a significant year-on-year increase of more than 20%.
Despite the economic and geopolitical uncertainties, HotelHub reported a 7% year-on-year rise in booking volumes during the second quarter, indicating that businesses are still traveling. Paul Raymond, Director of Business Development at HotelHub, commented, “It is encouraging to see signs of a slowing in rate growth trajectory; however, these are still uncertain times for the global economy and, with the US election looming, it may be some time before we know whether this will be a continuing trend.”
Travel Trends: Earlier Bookings and Stable Stay Lengths
The data also reveals interesting trends in booking behavior. Business travelers are booking accommodations earlier than in 2023. On average, bookings were made 16.7 days prior to check-in during Q2, a 19% increase from the previous year. Domestic bookings were made an average of 15 days ahead of arrival, up from 12.2 days in 2023, while international bookings had an average lead-in time of nearly 20.75 days, an increase from 18.75 days last year.
The average length of hotel stays has remained consistent in the post-COVID era, averaging around 2.5 days since 2022. International trips consistently average just over three days. The report suggests that the growing trend of hybrid working models is influencing travel patterns, with business travelers planning trips to coincide with days in the office.
Top Destinations and Domestic Stays
European cities dominated HotelHub’s list of the most booked destinations, accounting for eight of the top 10 cities during the quarter. London topped the list, followed by New York, Paris, Stockholm, and Rome. Domestic stays accounted for just over two-thirds (69%) of all HotelHub’s bookings, although this figure was slightly lower in Europe at 62%.
