Business Travelers Increase Use Of High-End Hotels

Growth in business travel demand in 2004 was greatest for higher-priced deluxe, upper upscale and upscale hotel segments, according to statistics released today by PricewaterhouseCoopers. The findings indicate a reversal of the 2001-to-2003 trend in which many business travelers, under pressure from companies to book more cost-effective options, favored midprice and economy hotels.

"The luxury, upper upscale and upscale segments were responsible for 5 percent, 18 percent and 17 percent of weekday demand growth, respectively," said Bjorn Hanson, who heads PwC's hospitality and leisure practice. Hanson also noted that without the 2004 revival in business travel, demand for hotel rooms would have grown only 2.3 percent, instead of an estimated 4.5 percent.

The positive outlook for deluxe, upper upscale and upscale hotels was reflected in hotels' aggressive negotiating posture with travel buyers for 2005 rates. Hotels in key gateway cities demanded and in many cases received double-digit percentage rate increases for 2005.