Australian and New Zealand hotels recorded a big jump in room rates at the end of 2022 – up six per cent and second globally only to North America with an 11 per cent increase on 2019 costs.
FCM Consulting’s latest Global Trends Report found that average room rates across 2022 remained volatile in Q4 2022 with only North America and Australasia surpassing 2019 levels with a rise of USD$25 and USD$17 respectively.
The Latin America and Middle East regions are also nearing pre-pandemic average room rates.
For occupancy, Central America led the pack as the only region ahead of pre-COVID levels, while Mainland China, which has just reopened its borders, sat at 72 per cent.
Occupancy rates in Australia and Oceania were 85 per cent of 2019 levels in Q4 2022, demonstrating a solid return for leisure and business travel.
FCM Consulting General Manager Felicity Burke warned that average global hotel rates will climb even higher before plateauing in 2024.
“Our forecasts tell us that 2023 average global rates are set to climb further – up seven per cent or USD$15 across all markets – with 2024 predicted to see those rates level out,” she said.
“As corporates contracted rates for the 2023 year, we saw a 45 per cent increase in the NRLA (Non-Last Room Availability) rates offered. As rates rose in 2022, dynamic discounts off BAR (Best Available Rate) became a higher rate option than negotiated fixed rates.”
Ms Burke said the challenge of hotel labour shortages would continue throughout 2023 and would contribute to rising room rates.
“Attracting, retaining and training staff is paramount to any successful hotel. With operating costs making up approximately 50 per cent of labour costs, increasing salaries to attract talent is only an option if such costs can be passed on to the end consumer,” she said.
Hotel prices are set to increase in global business hubs in 2023, find out more here.
For more info, head to fcmtravel.com
