Not nine months ago, business travel hotels, that have had a bruising three years through the recession, had nowhere to go, but up. Today, the economy is picking up again, and so is business travel. People who travel on business today are beginning to notice that things have changed at business travel hotels somewhat since the recession ended. Prices that were unrealistically low through the recession, have begun to seriously pick up. But hotels aren’t just raising prices for nothing given in return. Often, they are raising the quality of their offerings and the perks that go along with business travel, as well, hotels near airports are a great place to stay on business.
When business travel hotels raised their prices by a couple of percentage points toward the end of last year, it must have been a truly satisfying experience; after prices tumbled through the recession to levels that hadn’t been seen for seven years, this was the first chance they had had to raise prices a little bit. Prices are still unnaturally low today; but you really shouldn’t expect them to stay this way any longer. Demand for hotel rooms keeps rising month on month. And travelers on business can expect to pay up to 10% more for their hotel rooms this year. The hotel companies are being especially cautious; taking a page out of the airlines’playbook, they are either taking capacity off the market or not adding any. America hasn’t seen such a slow hotel construction market since the 80s.
Interestingly enough, hotel prices aren’t on the upswing everywhere. In the largest cities, New York, San Francisco, Washington DC and so on, prices certainly are up nearly 10%. At the less-celebrated cities, Seattle, Tampa or Dallas, prices actually are down by as much. It just takes time for things to smooth out.
As much as hotels are trying to stabilize their prices, they aren’t taking their customers for granted. Renovations and product improvements are apparent across the board. Sheraton just completed a $5 billion renovation program for dozens of its hotels. There are lots of other hotel chains that are expected to do the same thing. The hotels are clear in their policy. If they are to get away with charging you more, they can’t just do that if you don’t see that you’re getting something extra for it in return. The renovations are meant to soften the blow of a return to a time when hotels held the power in all negotiations.
Corporations negotiating for their business travel needs this year have discovered that business travel hotels have raised their prices by 15%. But they are offering stuff for free for the price. There are free Wi-Fi, free meals, and so on. In general, the three and four-star hotels are far more malleable when it comes to price and perk negotiations than the five-star hotels.