Slight Rise Predicted for Hotel Rates in 2017

Hotel rates will slightly rise in 2017 in Orlando, Seattle, Dallas, Atlanta and Denver, but potentially fall in Los Angeles, Houston, Washington, DC, and Charlotte, North Carolina, according to a recently released report.

The predictions are part of Travel Leaders Group’s 2017 Global Outlook, which utilizes data from multiple sources to make predictions for flight, hotel and other travel prices throughout the world.

The report predicts that overall, U.S. hotel rates will show a marginal increase in 2017, from $153.16 to $154.59, but says that this is not at all certain.

“Hotels have been reaping the benefits of low supply and high demand for the past 6–7 years,” the report states. “Major cities such as Chicago, San Francisco, Minneapolis, New York City, Philadelphia, Miami and Boston have added a lot of new room capacity over the last two years and it will take time for the market to adjust.”

It adds that the impact of Airbnb still hasn’t been fully analyzed, but that it will have a deflationary impact on traditional hotel rates.

The average price of a domestic airline ticket is predicted to be $410.21, the same as in 2016, but a significant decrease from $444.26 in 2014. Airline supply is outpacing demand for the first time since the “big three”—American, Delta and United—emerged from consolidation.

“We believe that airfares will remain largest flat in 2017 as carriers work to reduce capacity,” the report states. “Low-cost carriers will continue to thrive and their collective impact will restrict the large-network carriers from meaningful price increases.”

The report predicts slightly lower airfares in Western Europe and Latin America, and basically no changes in fares in the Middle East and the Asia Pacific region. A slight increase in hotel prices is expected in Europe, the Middle East and Africa, while no change is predicted in the Asia Pacific region and a small decrease is forecast for Latin America.

Overall, the report predicts that global travel transactions will show modest grow, and air and hotel prices will remain largely stagnant.

Travel Leaders Group operates company-owned, franchised, and affiliated travel agencies throughout the world, and issues its Global Outlook annually.

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