April Hotel Rates To Jump Significantly

JP Morgan Chase analysts released data today predicting hotel rates in key business travel destinations to be an average of 20 percent higher this April than in April 2003. The data show projected rate increases exceeding 20 percent in Atlanta, Los Angeles and New York. New York is expected to have the highest expected monthly increase of 29 percent. JP Morgan Chase based the forecast on rack rates quoted by hotels in local markets.

The data suggest that the lodging industry rebound, which gained momentum as 2004 progressed, shows no sign of abating in 2005. Compared with the traditionally quiet first quarter of the year, April marks the start of a peak season for business travel.

Most affected by the jump in prices are buyers who rely on floating consortia rates to get the coverage they need. As a result of such dynamic pricing, consortia rates are likely to rise a comparable percentage. Buyers of small and midsize programs are likely to be affected the most since they are least likely to have enough volume in many of these cities to warrant a negotiated rate.

The year-over-year projected rate hikes for April are the largest monthly increases in two years, according to JP Morgan Chase analyst Harry Curtis. Curtis noted that Orlando was the only key market in which rates are not projected to rise. In fact, he forecast that April prices in Orlando will decrease 1.6 percent as the city continues to suffer from the effects of last fall's hurricane damage.