Thanks to convention-center reservations that are at least 13 percent higher than in 2022, according to a recent data study and forecast from Lodging Analytics Research & Consulting, group demand at urban hotels in 2023 will probably be more than 10 percent higher than last year.
In contrast, this year’s urban travel industry will have fewer travellers who are travelling for pleasure or transient business. First, according to Ryan Meliker, president and co-founder of Lodging Analytics Research & Consulting, leisure travel is predicted to decline by as much as 30% in 2023 as a result of the termination of government stimulus funds and the possibility of a recession.
Second, according to Meliker, who was reported by Hotel News Now, “we think those rates will never return back to their 2019 levels,” the rate of downtown-office usage is currently less than half of what it was in 2019. There will be fewer room nights available from the corporate transitory segment as a result of the reduction in the number of nights that employees spend travelling to meet with clients.
In contrast, Meliker observes that “hotels will have better pricing power over group business travel as, instead of sending travellers on short transitory business trips, firms may send employees to more substantial conferences to facilitate business more effectively.”
Relatedly, according to industry researcher CBRE, average daily prices at luxury hotels in the top 65 U.S. cities would increase by more than 5% from 2022 rates.
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