As we dive into a new year, hoteliers across industry segments and across the country will be asking themselves what 2019 is going to look like. Will business continue to grow and where will that growth be centred? Which segments will flourish and which will wane in popularity? Will political unrest impact travel? While no one can claim to have those answers, based on key market indicators from industry experts, the hotel industry is poised for another solid year. Occupancy and room rates are expected to grow and the level of new hotel builds also remains strong. Certainly, as the world becomes more fragile, there’s always the fear that the situation could turn on a dime.
Having said that, according to the American Express Global Business Travel new Hotel Monitor 2019, released by American Express in late fall, industry metrics are strong and travel managers should prepare for a diverse and complex market. The report finds geopolitical factors, along with global, regional and local economics, are driving a diverse range of conditions for those negotiating hotel rates for 2019.
Here are a few highlights and insights from that report:
• Tourism is booming in Canada. Recently announced initiatives to increase Chinese travel to Canada in 2018 and beyond mean Vancouver and Toronto will be the country’s most visited destinations by Chinese tourists. This will have further impact on room rates.
• In Vancouver, growth is expected to come in at around three per cent. Overall rate increases have been the norm during 2018 and this will continue into 2019. Convention business has increased by 92 per cent, with six low-season conventions contributing towards the overall increase in business travel.
• Hotel rates in Toronto are anticipated to rise by seven per cent in 2019. As an arts/culinary/business centre, growth is expected within the upscale to luxury tiers.
• City-by-city hotel pricing for 150 key destinations around the world shows an overall average two-per-cent rise in hotel rates globally.
• Traveller security and political unrest are expected to catalyze significant rate fluctuations globally and drive demand for more security-compliant properties.
• The APAC region is anticipated to account for nearly two-thirds of global growth, with approximately 5.6 per cent GDP growth in 2018 and 2019.