As we turn the page on a new year, hoteliers across the country are wondering what 2015 will look like. According to a recent study by American Express, the horizon looks bright.
“Airline consolidation, stricter corporate travel policies and limited hotel supply are changing supply and demand dynamics and are also expected to impact pricing next year,” according to the aforementioned report titled “The American Express Global Business Travel Forecast 2015.”
Hoteliers will be pleased to know that, according to the Amex forecast, North American hotel rates are expected to increase in 2015, fuelled by solid economic growth, increasing demand and reduced inventory. “After an extended period of relative weakness, hotels are looking to capitalize on favourable market dynamics to increase profitability,” says the study. “As the economy picks up and business demand grows, price increases are anticipated across the region; however, the degree of these increases will vary significantly city to city.”
Interestingly, though global geopolitical tensions are now part of our everyday reality, global tourism stats continue to gain strength, and tourism remains a growing industry. According to the Canadian Tourism Commission (CTC), the growth of the middle class in emerging markets is spurring demand for travel, especially from Asia. In fact, China has now become the top spender on international tourism, while travel from Latin America is also on the ascent. What’s more, Canada’s traditional markets — the U.S. and the U.K. — are bouncing back and tourism from Australia, New Zealand and Japan is on the rise.
Surely, another sign of the dynamism of the marketplace is the plethora of emerging new brands. Through all the activity, what will continue to be important is a hotel’s capacity to differentiate itself from its competition. It’s equally important to remember that an increasing number of travellers will be seeking authentic and experience-based travel. This comes at a time when the average traveller demographic is changing. “One in every five visitors to Canada is under age 24, reflecting the desire of Gen Y to see the world,” says a CTC corporate plan summary. “Retiring baby boomers are also taking advantage of their accumulated wealth and free time to travel.”
Young or old, after years of economic malaise, the world is happily rediscovering travel, and, hopefully that bodes well for the hotel industry. Happy New Year.