Global hotel prices are expected to increase 2.5 percent
year over year, and the price paid by meeting and event planners likely will differ
vastly by region, according to CWT Meetings & Events’ 2016 forecast.
Trends expected for 2016 include tighter hotel cancellation
policies, growing food and beverage costs and an increased focus on compliance.
“Many companies will try to harness their combined spend as they look for ways
to cut costs and improve program efficiency and control,” said CWT M&E
executive vice president David Moran. “This will continue to drive increased
interest in strategic meetings management and consolidation.”
Further trends predicted in high-demand markets include
hotels using harsher revenue-management tactics for group rates, limiting
rebooking dates or the ability to sell unneeded rooms, opting not to hold space
while responding to availability requests and limiting the hold window for such
requests.
Regional Outlook
North American hotel prices are forecast to increase 4.3
percent year over year, as demand growth in both the transient and group space
continues to outpace supply growth. CWT M&E expects the volume of meetings held
domestically to increase next year and projects group size to grow 2 percent.
Cost per attendee per day will increase 4.5 percent, with food and beverage
continuing to be a significant driver of that metric.
In Europe, CWT M&E reports, buyers are gaining greater
negotiating power as the region sees slow but steady growth. Hotel prices in
Eastern Europe are expected to increase 2 percent, while prices in Western
Europe are forecast to increase 0.7 percent. The forecast reports that while
European interest in SMM is growing, some companies continue to struggle with
the diversity of the countries and cultures across the region. Additionally,
suppliers in the region have created stricter attrition and cancellation
clauses. Group size is expected to increase 1.2 percent from 2015, and cost per
attendee per day should decrease 0.4 percent.
Hotel prices in Asia/Pacific are expected to increase 3
percent. Though economic uncertainty threatens to affect regional growth, China
and India likely will drive demand, compensating for deficiencies in the
region. Group size is expected to increase 11 percent, and cost per attendee
per day is predicted to grow 5 percent. CWT M&E reports that global clients
that have a presence in Asia Pacific are looking to implement SMM programs for
improved control and cost savings but not at the expense of local business
needs.
In Latin America and the Caribbean, hotel prices are
forecast to increase 3.7 percent. This year, corporate group size in the region
dropped by almost 10 percent from 2014 levels as a result of worsening economic
conditions in Brazil and Argentina. In 2016, group size is predicted to drop
1.5 percent. CWT M&E reports that the pharmaceutical industry should drive
meetings growth as North America-based companies expand their meetings and
events programs and visibility in the region. Cost per attendee per day is
expected to increase 1 percent.