Hotel construction in a post-recession boom phase
Source: CNBC / Amy Langfield / 24 February 2014
Amidst a changing hotel industry, hotel room price is still king for travellers
Travellers across the globe are becoming ever more demanding in what they expect from the hospitality industry. They want unique travel experiences and personalised service. They require modern conveniences and on-site facilities and services, like fast Wi-Fi, to allow them to work away from the office. They want the ability to book their stay quickly and simply. And, most importantly, they want to know they’re getting the best hotel room price available.
It’s a brand new world of travel out there. Populated by a new breed of traveller. However, the one major constant is that people still expect great value for money when staying at a hotel. They still demand the best hotel room price available.
Hotel room price is still king amongst most travellers’ needs when booking a holiday.
This is not to say that the modern traveller is prepared to skimp on paying a premium price completely and risk staying at a run-down establishment. Rather than looking for the cheapest deal, they are instead looking for the best deal when it comes to booking their hotel room. They are looking for the best value for their holiday dollar.
And the proof is in the pudding.
There is a wealth of advice out there about which hotel booking app to use to not only save time but also money when it comes to booking your next hotel. Whenever hotels offer special rates for online bookings, the numbers of reservations they receive jump significantly. Which has the two-fold benefit of saving the hotel on labour costs and benefitting the customer with discounts that make them more likely to refer the hotel to other travellers. A hotel does not have to employ as many reception staff if the guests are doing all the booking-in themselves. And dangling discounts for guests who book online helps to soften the blow of the rising cost of the average hotel room price for budget-conscious travellers.
What factors are driving up hotel room rates? – I hear you ask. Recent research conducted by international corporate services company HRG reveals that increasing hotel room prices globally are being led by supercities. The price hikes in these large cities, whose inhabitants total in the millions, are far in advance of what’s being seen in smaller towns and cities. Hotels in big cities that attract a lot more visitors can charge a higher average hotel room price than in smaller to medium-sized destinations.
So, it stands to reason that a boom in hotel construction is currently underway in places like New York and Washington, compared to places like Nashville and Wilmington. Hotel development and construction has picked up speed again in supercities since the GFC. Indeed, real estate agency Curbed maintains a map of hotel construction underway in New York City. Currently, there are some 48 new hotels in various stages of being built. This marks the Big Apple out as having the most hotel rooms in construction out of all North American supercities. And, given the fact that it is a hot destination for many US and international travellers, it is not surprising to see that the city also ranks atop the average hotel room price list.
Whilst value is still king for most travellers, this is not to say that hotels should slash their room rates to attract more guests. Certainly, hotels in supercities will always be a much sought after destination with travellers and thus can charge premium prices. However, if hoteliers want the best of both worlds, getting great returns on their hotel room prices and attracting more guests, they should strongly consider the power of the discount.