In August, we reported that hotel fees and surcharges are set to hit record levels in 2015. Based on consecutive-year increases over the past five years, 2016 may well see another increase. But wait, there’s more…

Beyond added fees, outlook for 2016 shows that room rates will be on the rise as well, according to a report by Bjorn Hanson, Ph.D., clinical professor at the NYU School of Professional Studies, Tisch Center for Hospitality and Tourism (the same source for the earlier report about 2015 surcharges).

According to the forecast, room rates will climb 6.5 to 7.5 percent next year, on average. This represents potentially the largest jump in hotel room rates since NYU has been creating these forecasts in 1987 (if the increase hits the low end of the range, it’ll just be the biggest jump since 2006).

“This is a larger increase than the approximately 6.25 percent for 2015, which was the largest increase since 2006,” Hanson says.

To put a further dent in corporate travel budgets, the increase in hotel room rates is actually higher than the forecast the forecast in some cases, as the forecast doesn’t account for changes in billing. For example, since 2010, more and more hotels are charging separately for amenities that were once included in room rates, such as internet access, use of fax machines, use of fitness centers and breakfasts.

So what does paying more for room nights (and paying more for less in some cases) mean for business travelers and corporate travel departments? One of the biggest effects could be a downgrade in accommodations. Instead of booking luxury hotels and resorts with full service, many companies may go down a tier and book upscale, limited service properties to at least stay even with 2015 budgets. (Oh, the horror!)

Some may also go outside of their portfolio of properties with negotiated rates to seek less expensive room blocks.

Corporate and contract rates make up nearly 20 percent of occupied room nights in the Unites states, and almost 30 percent of hotel revenue, so it seems 2016 should be a good year for the lodging industry, barring a snapback.

According to Hanson, “These estimates are based on selected interviews with industry executives and corporate travel executives, analysis of industry financial data, press releases, and information available on hotel and brand websites.”

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