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Hotel
Monitor
2020
Powered by
Global Business
Consulting
HOTEL MONITOR REPORT 1
Global Business
Consulting
WHO WE ARE WELCOME TO THE HOTEL MONITOR 2020
American Express Global Business Travel and Expense This report, analyzing factors that could Technology is a major theme for the
Travel (GBT) is the world’s leading (T&E) Management: impact how you buy hotels, is produced Hotel Monitor 2020: digital innovation
business partner for managed travel. by the Global Business Consulting (GBC) is driving change across the hotel
Analyzing and benchmarking clients’
The Global Business Consulting (GBC) team at GBT. landscape, creating new opportunities
T&E processes. Managing T&E projects
team at GBT works with companies and to drive savings and improve the
related to online booking tools (OBTs),
organizations to create travel programs The Hotel Monitor 2020 is based traveler experience. Underlining the
expense environments, card payment
tailored to achieve specific goals. Our on a custom-built model combining growing role of technology in corporate
solutions, integration between client
extensive capabilities and results- seven years of historical booking data lodging, GBC’s new Hotel Lobby
systems and GBT systems. Optimizing
oriented approach allow us to build and from GBT’s proprietary data lake with platform uses the latest AI and data
the T&E environment based on
implement strategies that streamline macroeconomic indicators and hotel technology to deliver strategic analytics
agreed KPIs, supporting clients with
processes, deliver savings, improve industry data, including occupancy and provide greater transparency and
maintenance of T&E tools.
compliance and reduce risk. rates and room yield data. The model’s forecasting capabilities.
findings are validated by GBT’s global
Business Intelligence (BI)
We base our approach around six network of subject matter experts. To help you understand how the fast-
and Data Advisory:
strategic consulting solutions that help evolving technology landscape could
clients implement a best-in-class travel Providing differentiated insight plus Across much of the world, the hotel impact your program, in the following
management program: actionable recommendations by industry is booming. Business and pages GBC consultants spotlight five key
analyzing client travel behavior and leisure volumes are growing, even as trends to watch. The Monitor concludes
Supplier Management – Air, performance using GBC’s proprietary international trade tensions continue to with advice for travel buyers on how
Accommodation, Ground Transport: analytics, GBT’s rich supply of T&E dampen the economic outlook. A healthy they can use data insights to optimize
data, and powerful BI and visualization global hotel construction pipeline will their lodging program. These topics
Detailed analytics to evaluate your travel
tools. Through data advisory, we can mean, in most cities, hotel rates remain are explored in more detail in the white
program with Key Performance Indicator
help clients make informed decisions stable or see only modest rises. paper which accompanies this year’s
(KPI) reviews of your supplier contract
in their travel management activities. Monitor: Putting data to work for your
management, travel spend, traveler
We utilize the datasets available to us One interesting trend for traveler lodging program.
behaviors, policy compliance and more.
to identify behavioral trends, enhance behavior in many regions, observed by
traveler experience and generate GBT local experts: modern business Corporate lodging is a large and
Change Management:
savings, delivering value throughout travelers are increasingly looking complex topic, and we can only scrape
Advising on strategy, predictive analysis the organization. for lodging options that offer shared the surface here. For strategic advice,
of impacts linked to expected changes, working spaces and a more relaxing configured for your travel program,
communication, program design and GBC Travel Program Management: environment. In response, hotel brands please get in touch with our Global
training plans. Piloting implementation are investing in lifestyle formats that feel Business Consulting team.
Clients benefit from an experienced,
of change programs, including less corporate.
single point of contact to provide a
organization, technology and processes. Joakim Johansson
holistic, strategic approach; driving day-
Vice President,
to-day activities with project ownership,
‘‘
Program and Process Optimization, Global Business Consulting
operational support, escalation
Policy Design and Review:
management and process improvement,
Assessment and benchmarking of deploying savings opportunities and
deployed end-to-end travel processes, efficiency initiatives.
including mission order, booking,
validation process and accounting For more information, visit: https://
interface. Project management and www.amexglobalbusinesstravel.
integration support when implementing com/corporate-travel-services/
“Digital innovation is driving change across the
new technology solutions, such as single global-business-consulting/ hotel landscape, creating new opportunities to drive
sign-on and HR feeds.
savings and improve the traveler experience.”
2 AMERICAN EXPRESS GLOBAL BUSINESS TRAVEL HOTEL MONITOR REPORT 3
Key 2020 City Hotel
Rate Predictions
London +1%
Seattle +2% Munich 0%
New York -3%
Tokyo +4%
Atlanta +1%
Shanghai +2%
Dubai 0%
Mexico City +3%
Bogota +4% Bangkok +2%
Sao Paulo +5%
Santiago +4% Johannesburg +4%
Sydney +1%
Source: GBT
Note: All forecasts are in local currencies
4 AMERICAN EXPRESS GLOBAL BUSINESS TRAVEL HOTEL MONITOR REPORT 5
Technology
Trends
Revenue management
As room rates flatten and traditional revenue
Technology is driving change across • Booking via the OBT can trigger growth comes under pressure, hotels are
every area of corporate lodging, from pre-trip approval requests for becoming more creative in how they drive
sourcing to the traveler experience. trips to high-risk destinations. And yields. Over the last couple of years, hotels
Here, the GBC team identifies five travelers can be mandated to book have been heavily focused on driving direct
specific areas where technology is only security-approved hotels in bookings, which can offer higher profits.
reshaping corporate lodging, and looks these destinations – the OBT can be This trend will continue, with hotels offering
at how organizations are responding. configured to only display improved mobile apps or booking platforms
these properties. and extended loyalty member perks,
Artificial Intelligence (AI) including tech-enabled personalization (for
• Travelers need to understand why
example, setting up rooms according to the
Hotels are investing in AI to help drive their safety relies on using the
traveler’s preferences).
value and differentiation for corporate approved channels to book travel. If
travelers. AI-based technology is being they go off-channel, the organization
In addition to powering loyalty programs,
deployed throughout the guest journey. cannot locate the traveler or their
evolving technology is enabling hotels to
Ahead of booking, guests can visualize itinerary. Booking policy-compliant
upsell value-added offerings across all
hotel rooms through augmented hotels via the OBT can also help
stages of the client experience. Hotels
reality. They can check in using facial address security concerns for
are also making use of improved data and
recognition and, during their stay, be groups potentially at risk in certain
revenue management tools to clearly define
looked after by robot-concierges who destinations, for example LGBT+
client booking patterns, and develop more
respond to voice-activated commands. or solo female travelers: as well
sophisticated revenue optimization models
AI allows hoteliers to meet the modern as offering only security-vetted
that go well beyond volume and industry
business traveler’s need for personalized properties, OBT bookings can
share. As a result, travelers may find it harder
service: using pattern recognition, hotels trigger notifications about what
to book their negotiated rates, particularly
can anticipate guests’ requirements information and advice on these
in compacted regions, and hotels are
and provide more responsive service. destinations are available.
increasingly pushing for dynamic pricing.
However, hotels must keep in mind the
With this approach, hotels give corporates
balance between greater functionality Cancellation policies
an agreed discount off their best available
and guest data-privacy protection.
In an effort to counter elevated rate. While dynamic pricing is often more
cancellation rates often associated with expensive than negotiated rates, it can
The growing scalability of data
the use of online travel agents (OTAs) be useful when corporates have ad hoc
processing, machine learning,
and re-shopping tools, many hotels requirements or when volumes in particular
computer vision, object recognition and
have implemented tighter cancellation locations do not warrant a fixed price.
unsupervised learning will offer hotels
policies, such as 72-hour advance
speed and cost reductions to offer
notice requirements. Guiding traveler decision-making
differentiated products in the medium
to long-term. Today’s travelers are tech savvy and
Hotel groups say this change is
accustomed to managing travel on their
necessary to reduce the impact of
OBTs supporting duty of care own. They feel comfortable researching
no-shows and open up more inventory
and selecting their travel or hotel options
The OBT plays a key role in driving travel to generate revenues. But it does
based on peer reviews and ratings. Driving
policy compliance and supporting an not support many companies’ travel
policy adherence may require a shift from
organizational culture of traveler safety patterns. Buyers should look to
compulsion to reward and education. Look
and security. Educate your travelers on negotiate more favorable cancellation
for tools, such as GBT’s Trip Recommender™,
the safety benefits of booking approved policies during the RFP process.
that actively incorporate traveler preferences
hotels via the designated OBT. These
into creating intelligent, personalized
include:
offerings. Also, consider how chatbots
• Any hotel included in the program For in-depth expert advice on how you and AI-powered messaging can create a
is vetted during the selection can use data to optimize your program, simplified, customized booking experience.
download our white paper here.
process via mandatory safety Technology can also help highlight the value
and security questions. and cost of booking decisions to the traveler:
for example, by incorporating pricing
intelligence into the booking process, you
can help the traveler save time and money in
their booking decisions.
6 AMERICAN EXPRESS GLOBAL BUSINESS TRAVEL HOTEL MONITOR REPORT 7
KEY CITIES Room rate forecast: North America
North America
-4% -2% 0 +2% +4% +6%
Atlanta +1%
Boston +1%
Chicago +5%
Houston 0%
Atlanta 1% New York -3%
The forecasts for North Home to multiple major brand hotels, Several factors point to room rate Los Angeles +1%
America are set against Atlanta as a whole should see minimal decreases in New York through 2019
rate rises. That said, the city’s Perimeter – 2020. The city is already seeing New York -3%
the background of an
expected global economic area, where low supply growth is occupancy rates, RevPAR and ADR slide.
matched with solid demand, could see Increased supply, with the addition of up San Francisco +4%
slowdown in 2019, with growth
accelerating again in 2020.1 prices rise by 2.5-3%. to 29,000 rooms in the coming months,
plus a softening city economy in 2020, Seattle +2%
Overall, the region should see Boston 1% will see room rates decline further.
Toronto
minimal rate increases in 2020. +4%
Despite falling occupancy, Boston
In the US, flat occupancy and a Among the new adds will be the world’s
full pipeline of rooms in
saw slight growth in Average Daily
tallest modular hotel. The AC Hotel New
Vancouver +3%
Rate (ADR) in 2018 – 2019. This trend
construction will drive York NoMad will be constructed from
will continue into 2020, driven by Washington, DC +3%
competition and limit the ability prefabricated modules built in Poland. It
consolidation and the major hotel
of hotels to raise prices. Rate is expected to open late 2020. Source: GBT
brands setting revenue-increase goals.
rises are more likely in Canada,
thanks to a relatively strong Influenced by the growing millennial
economic performance and
Chicago 5% cohort of business travelers, Seattle 2% Vancouver 3% Washington, DC 3%
slowing capacity growth. In terms of hotel occupancy and corporations continue to explore non-
The fastest growing city in the US, home The Vancouver economy continues to
Revenue Per Available Room (RevPAR) traditional lodging options, including The majority of hotel business in
Look out for major hotel brands, to leading technology and Fortune 500 expand, which is expected to support
growth, Chicago is one of the best shared lodging and hotels that offer Washington, DC, is driven by the federal
such as Hilton, seeking to companies, and a significant leisure hotel rate rises of 3%.
performing cities in North America. innovations including “grab and go” government, followed by tourism.
change pricing strategies, with destination, Seattle is gearing up to
Corporate relocations, attracted by breakfasts, mobile apps for check-in and Occupancy is largely determined
multi-year contracts, off-cycle welcome more visitors. The city is Watch out for developments on
a low cost of living, strong talent pool room key, and communal work spaces. by changes in government policy,
sourcing outside the traditional expanding Seattle-Tacoma International non-traditional lodging: Vancouver has
and Chicago’s geographically central national events and the electoral cycle:
RFP period, and dynamic pricing, and ten hotels are in development, which launched a number of initiatives that
location, will continue to drive demand San Francisco 4% together will add around 3,000 rooms to may curtail the expansion of Airbnb in
occupancy levels and ADR fell during
where prices adjust continually and push rates upwards. the government shutdown between
as the balance shifts between Room rates are predicted to rise in San the city’s bed stock. A further 21 hotels the city. In a first for Canada, Airbnb
December 2018 and January 2019.
supply and demand. Other Francisco, as employment continues are at the planning stage. has been required to collect provincial
Houston 0% to expand, albeit at a reduced rate, and sales taxes on all short-term rentals, as
chains are starting to follow suit Corporate transient travel competes
with similar pricing strategies. The period 2018 – 2019 saw a steady visitor numbers grow. Following the Despite expected economic activity, well as municipal and regional taxes.
with a strong leisure sector. With
increase in Houston’s hotel capacity, as re-opening of the vast Moscone Center supply growth will prevent rates from In 2018, Vancouver passed a rule that
Amazon scheduled to start moving into
Many hotels will harness new new properties opened downtown and convention and exhibition complex in rising faster than the forecasted 2%. restricted Airbnb rentals to principal
its Arlington, VA, facilities late 2020,
technologies, processes and in the city’s rapidly expanding suburbs. January 2019, occupancy rates are One factor that could raise hotel costs residences and required that operators
Washington, DC, could see an increase
performance metrics to optimize The arrival of additional rooms means expected to rise after a decline in 2018. and push up hotel rates over time: be licensed. As of March 2019, the city
in rates.
housekeeping costs and drive rates are likely to remain unchanged even Seattle’s tough labor laws require reported that only 55% of listings were
savings: these have the potential as recovering oil prices drive up demand. After several years without major employers to set schedules 14 days in abiding by this rule. 2
to decrease rates as operational openings, San Francisco is welcoming advance and offer more hours to current
expenses fall. Technology will Los Angeles 1% three new hotels through 2019, adding employees before hiring new staff.
also increasingly shape the more than 625 rooms to the city’s bed
While Los Angeles has been
guest experience, as hotels
experiencing strong GDP growth, hotel
stock, with a similar amount expected in Toronto 4%
introduce self-service kiosks, 2020. Despite the capacity boost, rising
occupancy in 2018 was 80%, decreasing With one of the fastest expanding
keyless entry and online occupancy will see rates rise.
year on year in part due to the addition economies in Canada, driven by the
check-in via mobile apps.
of nearly 2,000 rooms. Capacity will finance, communications and life
continue to increase through 2019 and sciences sectors, hotel rates are
into 2020, with openings from brands forecast to rise by up to 4% as demand
including Fairmont, Park Hyatt, Edition grows. Another upward influence on
and Thompson. It will take time for room rates: the introduction of the 0
occupancy levels to stabilize. At the city DOWNLOAD THE FULL Municipal Accommodation Tax in 2018,
level, median ADR is likely to increase CITY FORECAST HERE which has added 4% to guests’ bills.
due to the new supply being heavily
oriented towards luxury and upper- Around 40 hotel construction projects are
upscale. But at an individual property underway, which will add more than 5,200
level, ADR growth could be minimal. rooms to the city’s stock, but this is not
expected to dent the forecast rate rises.
8 AMERICAN EXPRESS GLOBAL BUSINESS TRAVEL HOTEL MONITOR REPORT 9
KEY CITIES Room rate forecast: Latin & Central America
Central & Latin America Bogota
0 +5% +10% +15% +20% +25% +30% +35% +40% +45%
+4%
Buenos Aires +47%
Mexico City +3%
Bogota 4% Buenos Aires 47%
Concerns about political Colombia is forecast to experience Financial turbulence in 2018 saw a Monterrey, MX +5%
and economic uncertainty strengthening economic growth in 2019 50.6% depreciation of the Argentine
through to 2021, as lower corporate peso, a strong reduction in government Rio de Janeiro
have had a negative +1%
impact on business travel in taxes boost investment, and are in turn expenditure and double-figure inflation.
expected to drive up demand.4 The economic context remains volatile, Santiago
Central and Latin America. +4%
Nonetheless, price rises are and Argentina’s GDP is expected to
forecast across the region as In response to an inbound tourism contract further through 2019.6 Sao Paulo +5%
demand outpaces growth. At the boom, almost 4,000 rooms are in
beginning of 2019, the hotel construction across the country, The forecast change in room rates Source: GBT
construction pipeline had been representing more than 7% of existing is mostly due to inflation. That said,
contracted by more than 25% supply.5 The significant growth of new demand remains strong with occupancy
year-on-year.3 inventory has kept occupancy low, at 73.6% YTD in Buenos Aires (vs.
particularly in Bogota. 63.3% for the country as a whole).
In fact, Buenos Aires experienced Rio de Janeiro 1%
Travel buyers should note that Bogota its highest January occupancy since
Occupancy in Rio is a healthy 63.8%
is rated “concerning” for traveler safety 2012, due in part to a lack of new rooms
YTD, and this number has risen strongly
in BTN’s Corporate Travel Index for entering the region. ADR growth in
year-on-year. However, hotels have
the Americas. Buenos Aires has outpaced the rest of
little scope to increase rates. The 2016
the country by double-digits and should
Summer Olympics and 2014 FIFA World
continue to do so.
Cup created a massive supply increase in
Brazil’s key cities. Rio alone saw 10,000
Mexico City 3% rooms added for the Olympic games. 0
Mexico’s GDP growth has fallen in H1
2019, owing to weak investment and lower Travel buyers should note that Rio de
export growth, as US imports have slowed. Janeiro is rated “concerning” for traveler
Trade tensions and political uncertainty safety in BTN’s Corporate Travel Index
have also dented business confidence.7 for the Americas.
Occupancy levels YTD have dropped Santiago 4%
slightly from 2018, ostensibly as a result
As a commodities exporter, Chile
of flat demand and increased supply. At
remains particularly susceptible to
Sao Paulo 5%
the start of 2019, more than fourteen
downturns in trade and manufacturing. Now in the third year of a slow recovery
thousand hotel rooms, representing
Economic growth is forecast to slow in following a deep recession, Brazil’s
3.5% of existing supply, were in
2019 – 2020, as the global economic economy is growing by little more
construction in Mexico City.
environment cools. Nonetheless, than 1% each year.8 The expected
sustained corporate demand and deceleration of the world economy,
Monterrey, MX 5% relatively high occupancy will mean as well as limited progress in the local
“Price rises are
One of the leading business and
industrial centers in Mexico, and located
close to the United States – Mexico
border, Monterrey is particularly
influenced by trade with the US.
In Q1 2019, Mexico Northwest, the region
that includes Monterrey, experienced
the country’s only double-digit decrease
in occupancy, which resulted in the only
double-digit drop in RevPAR.
rates are expected to increase by up to
4% in 2020.
With its economic and political stability,
Santiago is rated the safest Latin
American city in BTN’s Corporate
Travel Index.
DOWNLOAD THE FULL
CITY FORECAST HERE
adoption of economic reforms, will limit
the economy’s capacity for growth in the
coming years.
Nonetheless, as Brazil’s commercial
capital and one of the leading business
centers in the Americas, Sao Paulo
is performing relatively strongly.
Occupancy, while on the low side, is
improving and ADR has improved 12.5%
YTD, versus 7.7% for Brazil as a whole.
‘‘ ’’
forecast across the
region as demand
outpaces growth.”
10 AMERICAN EXPRESS GLOBAL BUSINESS TRAVEL HOTEL MONITOR REPORT 11
KEY CITIES
Frankfurt 1% Munich 0%
Europe
London’s confirmed accommodation
pipeline to 2020 covers a diverse range
Travel to Frankfurt is driven mainly by Despite sustained year-round demand,
of segments, products and brands.
banking and professional services. Munich hotel rates are not expected
London will see a further 10,000 new
Additionally, the city is a major center for to change. At the upper-tier, the arrival
rooms open in 2019 and 2020. Some of
trade fairs. Together, these factors mean of several premium hotels in 2018 to
the largest new hotels are set to open at
high occupancy and price levels through 2019 has reduced scope to raise rates.
Heathrow Airport.
the year. Meanwhile, multiple openings planned
for 2020 to 2021 – including the
Microstays – where travelers hire a hotel
Amsterdam 1% New hotel openings, including IHG,
room from a period as small as three
budget brands Motel One, Premier Inn,
Intercity, Leonardo, Melia, NIU and NH Prizeotel – will push rates down in the
Hotel rates are predicted and Radisson, account for most of The city offers diverse lodging options, hours – have become increasingly popular
Collection, will ease the upward pressure economy category.
to be stable across key the new rooms, with lower end with big brand hotels and independent over the last two years. These short
on room rates. Focused on upper-tier
European business categories such as Holiday Inn properties. New higher tier hotels have hires offer busy travelers a chance to
business, Frankfurt offers only limited Reflecting the modern business
centers, against a backdrop of Express and Hampton by Hilton the opened in recent years, keeping price freshen up or recharge between meetings.
economy inventory. An exception is traveler’s appetite for informal lodgings,
moderate economic growth in most popular with hotel developers.11 increases low in downtown Amsterdam.
the Motel One brand, which opened its corporates are increasingly using young,
2019, followed by an expected In the suburbs, however, where
fourth property in the city in June 2019.
Madrid 4% on-trend hotels, such as 25hours, as an
‘‘
Responding to traveler demands for corporate offices tend to be located,
acceleration through 2020.9 Increased economic activity is feeding alternative to the standard brands.
more informal hotel environments, the rates are rising more rapidly.
The big story in Europe is the major brands are re-configuring public One developing trend to watch: through to increased demand and
boom in hotel development, areas in their properties. Accor’s Ibis long-stay serviced apartments are rising room rates: the Monitor’s 4%
VAT on hotel stays rose to 9% at the
which has hit a record high. At chain, for example, has embarked on becoming increasingly popular among forecast for Madrid is the highest of any
beginning of 2019. Most hotels passed
the end of 2018, Europe’s total a transformation of its hotel lobbies business travelers. of the key European business centers.
this increase through to guests. No
construction pipeline had to create welcoming, communal International investors are taking
further change is expected for 2020.
reached 1,569 hotels with spaces for working and relaxing. London 1% note: 2018 investment in Spain’s hotel
“The big story in
243,947 rooms, a 19% increase industry broke new records, with Madrid
year over year.10 This major
While many business travelers today Concerned about over-tourism, In spite of uncertainty related to Brexit,
a principal focus for buyers. 12 Europe is the
favor sharing economy lodging Amsterdam is limiting the number of London retains its status as a global
boom in hotel
’’
expansion of room stock is inner-city hotel openings and approved business hub and center for tourism,
options, several cities across Europe As a result of concerns about the impact
occurring despite lower growth
in the region, and uncertainties
are staging a fightback against Airbnb properties. Looking ahead, these sport and cultural events. Sustained
of over-tourism on local communities, development,
short-term apartment rentals. moves could lead to higher lodging costs. demand has allowed London to maintain
about Brexit and the global
Amsterdam, Madrid and Munich are high occupancy rates. However, ADR has
Madrid’s city government wants which has hit a
economic outlook. to introduce severe restrictions on
three locations where GBT’s local Brussels 3% risen slowly on account of the steady
apartment rentals. These proposals record high.”
Germany is leading the experts have identified moves by local increase in supply: around 20,000 new
As well as being home to key EU would eradicate the majority of
development boom with 379 government to curb offerings such as rooms joined the city’s inventory in the
institutions, Brussels is one of the apartments currently used as vacation
projects in the pipeline, with the Airbnb. Going forward, as well as last five years.
world’s top destinations for international rentals in the city.
UK closely behind with 281 hotels putting upwards pressure on prices, conferences while also attracting
in the works. Branded hotels, this could reduce traveler choice. significant inbound tourism. Sustained
including IHG, Hilton, Marriott demand for lodging means hotels in the
city are likely to raise room rates by up to
3% in 2020.
Room rate forecast: Europe
On the supply side, the construction
pipeline is relatively quiet: key inventory 0 +1% +2% +3% +4%
arriving in the next year includes the
140-room Moxy in the city center and Amsterdam +1%
the 305-room nhow.
Brussels +3%
Dublin 3%
Dublin +3%
The hospitality sector in Dublin is
experiencing rising occupancy and ADR Frankfurt
as Ireland’s relatively strong economic +1%
performance, combined with healthy London +1%
inbound tourism numbers, continues to
drive demand. Madrid +4%
Occupancy levels are expected to remain Munich
high due to persistent shortfall of supply.
0%
This despite a hotel development boom Paris
that will add almost 700 new rooms
+3%
to the city’s stock by 2020, with an Rome +1%
estimated additional 3,000 hotel bound
for Dublin by 2023. Stockholm +1%
Source: GBT
12 AMERICAN EXPRESS GLOBAL BUSINESS TRAVEL HOTEL MONITOR REPORT 13
KEY CITIES
Europe
Paris 3% Rome 1% Stockholm 1%
A major center for business and tourism, One of the more expensive cities in Demand for guestrooms in Stockholm’s
Paris attracts visitors throughout the Europe for the visitor, Rome saw rising hotels is outpacing supply, even though
year. Rate rises, however, are likely to be ADR in 2018 and Q1 2019. Against a the city added 1,840 rooms last year
relatively modest as the city continues background of very low GDP growth, alone, and ADR is rising steadily. Demand
to add new capacity at pace. Key arrivals and a slew of hotel openings, room rates is expected to continue to rise as
include the re-opening of the Pullman are expected to be stable, growing only economic growth strengthens in 2020.14
Montparnasse and the opening of the marginally in 2020.13 The city is responding to the uptick in
Courtyard Paris Porte de Versailles. demand by adding new capacity: 4,900
Scheduled for Q1 2020, these large Among the planned openings are the hotel rooms are planned in Stockholm
hotels are strategically located for new Iberostar, the 439-room Hilton County over the next five years, with
corporate and exhibition visitors. At the Rome Eur – La Lama and the 297-room 1,236 in downtown Stockholm.
upper-tier, Bulgari has announced plans Radisson Blu GHR.
for a new luxury hotel in Paris to open Spurred by the city’s hotel growth wave,
the same year. international hotel brands are stepping
up their activity, with recent major
Paris has a growing non-traditional investments by Radisson Hotel Group,
lodging offering, attractive to many Zleep Hotel and Scandic.
modern business travelers. Two
examples of this trend opened in 2019:
the 25Hours and Jo&Joe.
0
14 AMERICAN EXPRESS GLOBAL BUSINESS TRAVEL HOTEL MONITOR REPORT 15
KEY CITIES
Middle East & Africa Lagos -1%
Demand for accommodation in Lagos
is weak, as many corporations restrict
Riyadh -8%
As part of a plan to diversify the
economy away from oil, the Kingdom
Tel Aviv 6%
A tourism boom, allied with the
continuing expansion of the Israeli tech
travel to the city on account of traveler of Saudi Arabia wants to increase the industry, is attracting higher volumes
safety concerns. Nevertheless, travel to number of visitors to Haji and Umrah to of inbound travel. Room rates are
Lagos continues to be essential for many 30 million a year by 2030 – up from 8 increasing as demand continues to
companies in the energy sector. million a year in 2016, when the Kingdom outstrip supply. However, the heightened
Abu Dhabi -4% Dubai 0% announced its Vision 2030 initiative. threat of terrorism could see rates fall if
The nations of the Middle Inventory tends to be smaller The plans are drawing interest from the any increase in attacks leads to a fall in
The UAE is experiencing a rapid increase The large increase in the number of
East continue to make independently-owned hotels, major hotel chains, who are starting to visitor numbers.
in its room stock, which is impacting hotels being built ahead of the 2020
large investments in apartments or high-end luxury hotels. increase building in Riyadh.
occupancy and pushing down rates. Expo has softened rates. However,
cultural and tourism projects as Tel Aviv is seeing a boom in boutique
Falling oil prices have further reduced the Expo is expected to generate high
they seek to pivot their The number of new hotel openings hotels, led by Brown Hotels.
demand, again putting downward demand, so rates should increase
economies away from oil. means supply currently exceeds
pressure on rates in Abu Dhabi. from October. A stronger economic
demand in Riyadh. Even with GDP Short-term rentals are not currently
performance forecast for Dubai through
Traditionally, luxury and growth forecast to grow by around 2%, regulated in Israel. While no timetable
The 2020 Expo event in neighboring 2019 and 2020 should also prevent rates
upper-upscale hotels room rates in 2020 are expected to fall has been announced for its introduction,
Dubai will cause demand to pick up. from declining.16
predominated in the region. by up to 8%.17 a proposed tax on Airbnb hosts could
Nonetheless, room rates are expected to
Increasingly, midscale hotels are reduce supply or push up rates.
decline by up to 4 percent. Hotel developments tend to be in the
becoming part of the hospitality
luxury and upper upscale tiers, though
mix, allowing countries and
cities to cater to travelers across
Doha -10% more midscale properties are appearing
as demand strengthens. Emaar
a wider range of income groups. Qatar has been under an economic
hospitality has developed the Rove
According to STR, 125,052 embargo, imposed by Saudi Arabia,
brand to tap into this segment.
rooms are under construction in Bahrain, Egypt and the UAE, since
the Middle East. With more than June 2017. The effect of the political
56,000 hotel rooms under situation on demand, combined with an
Johannesburg 4%
construction, the United Arab oversupply of upper upscale and luxury With the local economy growing and
Emirates (UAE) accounts for rooms, is forecast to drive a significant demand rising, while the construction
almost 45% of this number.15 decline in room rates. pipeline is narrow, Johannesburg is
seeing rising ADR.
In Africa as a whole, around
25,000 hotel rooms are currently The hotel industry is dominated by major
under construction. The Hotel chains, though lodge and independent
Monitor looks at the specific hotels are also a strong presence.
issues driving rates in the key
business destinations of Lagos
and Johannesburg.
Room rate forecast: Middle East & Africa
-10% -5% 0 +5% +10%
Abu Dhabi -4%
Doha -10%
Dubai 0%
Johannesburg +4%
0
Lagos -1%
Riyadh -8%
Tel Aviv +6%
Source: GBT
16 AMERICAN EXPRESS GLOBAL BUSINESS TRAVEL HOTEL MONITOR REPORT 17
KEY CITIES Room rate forecast: Asia Pacific
Asia Pacific Bangalore
0 +1% +2% +3% +4% +5%
+5%
Bangkok +2%
Beijing +1%
Bangalore 5% Bangkok 2% Ho Chi Minh City +2%
Home to some of the As India’s high-tech hub, and home Thailand looks forward to welcoming a
Hong Kong +3%
world’s most dynamic to major multinational corporates, growing number of visitors, even with an
economies, the Bangalore is one of the top business uncertain political situation following
Kuala Lumpur +2%
hospitality industry is growing destinations in the country. Demand the inconclusive general election in
from business travelers means room Q1 2019. According to government
rapidly across Asia Pacific. Melbourne +2%
Thousands of beds are being rates are expected to rise by up to 5% in estimates, tourist numbers for 2019 will
added in the region’s key cities 2020, even as supply grows at double- be up by about 8%, reaching a record Shanghai +2%
every year. Even with the added digit rate.18 41.1 million. 19 To accommodate the
expected growth in demand, Bangkok’s Singapore
capacity, sustained demand in +2%
these growth economies means The international hotel brands are Suvarnabhoomi airport is currently
rates are likely to see some rises. increasingly making their presence being expanded. When complete Sydney +1%
felt in the city. Key new additions to in 2020, it will handle 60 million
Inbound leisure and business Bangalore’s hospitality offering include passengers per year. Tokyo +4%
were the key drivers for hotels in India’s second Four Seasons and a
Asia Pacific, but increasingly Radisson Red hotel. Fern Hotels & To stimulate the services sector, the Source: GBT
domestic travelers are filling hotel Resorts, an Indian brand built around national government has reduced taxes
beds, compensating for any falls environmental sustainability, is also on hotel stays and expanded the number
in international visitor numbers. opening a hotel. of construction permits for new hotels.
The Greater Bangkok Region is one of
The major global hotel brands
The Indian Machine Tool Manufacturers’ the key areas for hotel development.
continue to build their presence Beijing 1% Ho Chi Minh City 2% Hong Kong 3%
Association will organize its flagship The majority of new inventory is 3-star,
across the region, developing
IMTEX Forming 2020 at the Bangalore 4-star and budget hotels.
inventory from budget and China is seeing rapid expansion of the Vietnam has seen significant growth of The opening of a bullet train connection
International Exhibition Centre in
mid-market to the upper-upscale hotel supply at every tier. Demand for foreign management companies and between Hong Kong and the mainland
January 2020. Billed as the largest event Meetings and events (M&E) is a strong
and luxury tiers. five-star hotels, driven by domestic international hotel brands in the last few in 2018 contributed to record visitor
of its kind in South East Asia, IMTEX is growth area for Bangkok’s hospitality
and international business travelers, years. A recent arrival in Ho Chi Minh numbers last year. The volume of
In 2020, the region will host the expected to bring more than 80,000 industry, as hotels look to drive up
is strong and expected to remain City, the Mandarin Oriental, underlines visitors, combined with a slowing rate of
highest-profile global event there visitors to the city. earnings on room bookings, the hire
robust. As a result, China is among the how the city is becoming a destination hotel development, resulted in very high
is, with the Summer Olympics in of conference facilities, and food and
most important countries for global for upper upscale travelers. citywide occupancy rates, which have
Tokyo. Japan hopes to attract 20 beverage sales.
operators, with brands such as Hilton persisted ever since. The gap between
million inbound visitors in this and Hyatt aiming to grow their presence. The chief destination for international supply and demand means rates for
gala year for the country. visitors, Ho Chi Minh City is expected 2020 are forecast to rise by up to 3%.
DOWNLOAD THE FULL
CITY FORECAST HERE Despite the rise in supply, occupancy has to maintain solid occupancy levels
not been negatively impacted. In fact, and ADR in 2020 due to a limited Hotel development rates are accelerating,
according to STR, occupancy for high- construction pipeline. Looking further with around 20,000 new rooms due to
end hotels has grown every year since ahead, relatively high yields in Vietnam be opened in the next five years.
2013.20 This means rates are likely to be are attracting Asian-based property
stable, and even rise slightly, in 2020. developers and real estate companies
focused on mid-market business hotels
‘‘
Key new developments for Beijing in Ho Chi Minh City and Hanoi.
include the launch of a joint venture
between Hyatt and Shanghai-based
Homeinns Hotel Group to attract
younger travelers in the upper-
midscale segment.
“The hospitality industry is growing rapidly
across Asia Pacific. Thousands of beds are being
added in the region’s key cities every year.”
18 AMERICAN EXPRESS GLOBAL BUSINESS TRAVEL HOTEL MONITOR REPORT 19KEY CITIES
Asia Pacific
Kuala Lumpur 2% Melbourne 2% Shanghai 2%
After five years of sustained hotel The fourth-fastest growing city in the Growing supply is compensated by
development, supply growth in Kuala developed world, growing by 125,000 demand growth, particularly on the
Lumpur has outpaced demand, people a year, Melbourne is predicted to domestic side: while trade tensions with
preventing significant rises in ADR. be Australia’s biggest city by 2028. the US have affected outbound travel,
there has been a much weaker effect on
The current construction pipeline of Supply has been growing, particularly in inbound and domestic travel.
25 hotels and 6,900 rooms will put the luxury sector, and is balanced with
additional pressure on certain areas of demand, meaning only modest rate rises Shanghai is experiencing major
the city, particularly for high-end hotels are expected. investment by global hotel brands.
since half of all the new hotels will be in Recent and new openings include JW
upper-upscale and luxury hotel classes. Australia is undergoing its largest-ever Marriott, Bellagio, InterContinental
hospitality expansion, with the biggest Shanghai Wonderland and the boutique
In recent years, global hotel chains growth in “lifestyle” hotel brands. These Edition brand.
have arrived in the Kuala Lumpur provide a less corporate experience
region, including premium brands such than can be found in traditional
as Four Seasons, W Hotels, St Regis business hotels. Aimed at tech-savvy
and Sofitel. Mid-range hotels include modern travelers, technology is a core
Hilton Garden Inn, Citizen M Bukit component of the offering, with features
Bintang, Travelodge Bukit Bintang and like free high-speed Wi-Fi, casting
Travelodge Central Market. capability to in-room screens and keyless
entry. New lifestyle-oriented arrivals to
Singapore 2% Sydney 1% Tokyo 4%
Melbourne include Marriott’s Aloft and Key developments, including the An injection of new capacity into Hotel development has been boosted by
Moxy brands, along with IHG’s voco. expansion of Changi airport and major Sydney’s room stock in 2019 and 2020 growing inbound tourism and rising ADR.
investment at Resorts World Sentosa, will push down occupancy. Room In 2018 the country welcomed a record
are expected to increase tourism rates are expected to rise by only 1%, 31.2 million visitors, an 8.7% increase over
and M&E business into Singapore. sustained by a full calendar of large the prior year and almost quadruple the
Nonetheless, even with steady GDP national and international events coming number of visitors in 2008. More visitors
growth forecasted, room rates are to the city. are on the way, with the 2019 Rugby World
expected to remain stable, with only a 2% Cup and the 2020 Summer Olympics.
rise predicted on account of inflation. 21 Despite being a gateway city, Sydney
has relatively limited luxury inventory. Despite a major expansion in hotel
In line with a global shift in business This looks set to change, with up to capacity in recent years, which has added
traveler preference towards non- 2,000 rooms under construction in and around 30,000 rooms, Tokyo is expected
traditional accommodation, Singapore- around the city. New arrivals include the to face a shortfall of around 3,500 guest
based lodging owner-operator Citadines 586-room W Hotel Sydney. rooms. With so much demand chasing
has unveiled Citadines Connect, a an inadequate supply, rates in 2020 are
short-stay version of its serviced Hotels are increasingly being designed predicted to rise by up to 4%.
‘‘
0
residence brand. to cater to mobile workers, offering
co-working and more informal
environments. Next Story Group’s DOWNLOAD THE FULL
Kafnu exemplifies this approach. The CITY FORECAST HERE
brand’s first Australian outpost, Kafnu
Alexandria, opened in Sydney in Q1 2019.
“The major global hotel brands continue to
build their presence across the region, developing
inventory from budget and mid-market to the
upper-upscale and luxury tiers.”
20 AMERICAN EXPRESS GLOBAL BUSINESS TRAVEL HOTEL MONITOR REPORT 21Using data to optimize
your lodging program Methodology
TIPS FOR BUYERS Forecasting requires a lot of good
data. We delved into our vast data lake to
understand the dynamics at a city level in
Data insights, presented in a clear 4. Data can help you understand local-currency terms, using proprietary
and compelling way, can give travel the factors that shape traveler sources including anonymized and
buyers the means to differentiate their experience. Think about how you aggregated hotel transaction data over
program and work more strategically can use data insights to improve the past five years.
with stakeholders, both within their traveler experience, thereby driving
organization and externally. compliance and reducing leakage. In addition to seeing what was happening
in key cities based on our data, we
5. Employee wellness is at the top of
Equipped with the right data insights, factored in other variables that impact the
the corporate agenda: explore how
buyers can achieve a number of important hotel industry as a whole. We augmented
you can use data insights to identify
benefits for the lodging program. These the data set with other macroeconomic
issues among your travelers and
include driving savings through more variables from the International Monetary
drive effective support solutions.
effective supplier negotiations, boosting Fund (IMF) and broader industry metrics
traveler compliance, and using insights 6. Engage key stakeholders – including from hotel data specialist STR.
to demonstrate the total value of HR, Finance, Sales and Operations
the program. – to agree the definitive data Good forecasting requires us not just to
and reporting strategy for your project the trend of the data forward. That
Here are seven tips to help buyers deploy organization. This will include the key ignores a lot of residual variation, as well
data in their organization, taken from deliverables for each stakeholder. as seasonal highs and lows, compromising
Putting data to work for your lodging Use all the available data to generate the accuracy of the forecast. The
program, a guide for travel buyers clear and relevant dashboards (your approach we use models the residual
developed by experts as a companion to TMC should support you) and issue variation using broader industry and
the Hotel Monitor 2020. them regularly. macroeconomic variables. We included
only those variables with the biggest
1. Make sure you understand the 7. Evaluate critical findings from the
impact to avoid overfitting the model.
four types of data: descriptive; dashboards and propose solutions
diagnostic; predictive; prescriptive – to your key stakeholders. If you
Using third-party expert forecasts of
and how you use them. can provide answers to problems
those external variables, we were able to
they don’t know they have, you will
2. It’s important to present data increase the accuracy of our ADR forecast
increase your credibility.
in a format that is easy for by adding our model of residual variation.
your audiences to understand.
This is a good time for travel buyers to
Think about using graphics and
start making more use of data insights.
visualizations to make your message
Suppliers are making the relevant data
more compelling.
available. There is a wealth of support
3. Don’t forget to look at what and advice available on how to harness
opportunities are available from data-driven insights, from consultants
For in-depth expert advice on how you
utilizing combined M&E and and TMCs. can use data to optimize your program,
‘‘
accommodation spend with hotel download our white paper here.
suppliers, as well as other benefits
such as reducing hotel attrition.
“Equipped with the right data insights,
buyers can achieve a number of important
benefits for the lodging program.”
22 AMERICAN EXPRESS GLOBAL BUSINESS TRAVEL HOTEL MONITOR REPORT 23ABOUT AMERICAN EXPRESS References
GLOBAL BUSINESS TRAVEL
North America
American Express Global Business Travel (GBT) is the world’s leading 1. www.bloomberg.com
business partner for managed travel. We help companies and their 2. www.theglobeandmail.com
employees prosper by making sure travelers are present where and when it
matters. We keep global business moving with the powerful backing of Central & Latin America
17,000 travel professionals in more than 140 countries. Companies of all 3. www.hotelnewsnow.com
sizes, and in all places, rely on GBT to provide travel management services, 4. www.oecd-ilibrary.org
organize meetings and events, and deliver business travel consulting. 5. www.hotelnewsnow.com
6. www.worldbank.org
Learn more at amexglobalbusinesstravel.com 7. www.oecd-ilibrary.org
8. www.bloomberg.com
American Express Global Business Travel (GBT) is a joint venture that is not
Europe
wholly owned by American Express Company or any of its subsidiaries
9. ec.europa.eu
(American Express). “American Express Global Business Travel,” “American
10. www.lodgingeconometrics.com
Express,” and the American Express logo are trademarks of American
11. tophotel.news
Express and are used under limited license.
12. www.euroweeklynews.com
13. www.bloomberg.com
No disclosure or use of any portion of these materials may be made without
14. ec.europa.eu/info
the express written consent of GBT. © 2019 GBT Travel Services UK Limited.
Middle East & Africa
15. www.constructionweekonline.com
16. www.bloomberg.com
17. www.imf.org
Asia Pacific
18. www.hospitalitybizindia.com
19. www.bloomberg.com
20. www.hotelnewsnow.com
21. www.imf.org
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