U.S. Gateway Cities Moderate Cost Increases in Q1

Gateway cities in the United States wrapped 2024 with historically high hotel rates. Going into the first quarter of 2025, several cities have seen those rates moderate, but not all. Looking at BTN’s 11 gateway cities as a whole in Q1 2025, per diems were slightly down compared to the prior quarter. Business travelers, however, aren’t traveling to a conglomerate “average” location, and each city on the index has its own cost profile. Seven cities saw per diem increases, while four showed declines—some significant. Here are some highlights, and you can do your own analysis of 200 global cities with BTN’s Corporate Travel Index Calculator.

[Editor’s note: Hotel and car data is updated quarterly; meal data is updated annually]

New York Takes a Break After Hosting Holidays

New York’s precipitous drop from its Q4 per diem countered several cost increases from other cities. Including New York in the average mix, per diems for U.S. gateway cities were down by 2.3 percent. If you exclude New York’s 25 percent drop, however, the average per diem in gateway cities actually increased 1.4 percent.  

Fourth-quarter 2024 hotel occupancy and rate in New York spiked as early as October and just kept rising through peak holidays in December. BTN’s Corporate Travel Index data for Q1 2025 corporate hotel bookings fell by approximately one-third in the city compared to the previous quarter, according to booking data from BTN partners Advito and Prime Numbers. Dropping demand—and rates—for car rentals also helped scale down the per diem. Meal costs, however, were running slightly higher than in 2024, up by about 6 percent in New York.

San Francisco Is Costliest City for Business Travel in Q1

Embattled San Francisco, which has been slow to recover from the pandemic and in 2024 was beset by continuous hotel labor strikes and vocal picketing throughout the fourth quarter at Hilton, Hyatt and Marriott properties, looks to have reset its hotel pricing in Q1. Hilton workers, the last to come to the table, ratified on Christmas Eve a new hotel contract brokered by Unite Here Local 2 union, securing wage increases across the life of the contract, healthcare benefits and workload limitations.  

Whether those improved contracts immediately impacted hotel pricing isn’t clear, but average corporate hotel bookings in the city rose by nearly 7.5 percent in the first quarter. Meal prices were up by about 4.5 percent. Falling car rental rates took some of the edge off the increases, but San Francisco surpassed New York in Q1 as the costliest city for business travel in the United States.

BTN Releases Annual Corporate Travel Index Per Diem Meal Data

Come and get it! BTN's annual study of meal costs in 200 cities around the globe is now available. Prices are on the rise in most cities and while the U.S. dollar started the year strong, recent volatility has weakened its buying power in recent weeks. That's reflected in some international cities where meal costs have increased significantly.

Find the new meal data here: BTN's Corporate Travel Index Calculator.

Snowbirds Spike Miami Per Diems

Annual migration to Miami in the winter months showed a significant impact on hotel pricing in the city. Add spring breakers to that mix, and you get a 16-plus percent rise in the average daily hotel rate for business travelers to the city during the first quarter. Car rental rates were fairly flat, but a 7 percent rise in meal costs also contributed to the 13 percent rise in daily costs.

Inauguration Pricing Hits D.C., But Then What?

All aspects of business travel in Washington D.C. rose relatively evenly across the board in Q1 averaging just over 6 percent. But the picture may be mixed in the city as previous inauguration pricing has commanded increases of more than twice that percent across first quarter pricing as crowds convened both prior to and after the inauguration proper. More recent reports on the city’s hospitality industry point to trouble on the horizon in the wake of government travel freezes and layoffs of government workers as the Department of Government Efficiency—or DOGE—has slimmed the ranks of numerous federal agencies. Across the entire quarter, hotel rates for business travelers were up just over 6 percent, car rental rates were up 5 percent and meal costs were up a little over 7 percent. Corporate Travel Index data for Q2 may reveal a deeper impact of those official actions.