Global Hotel Rates Expected to Moderate in 2025

The outlook for global hotel rates in 2025 indicates a slowing of price increases, according to a study from American Express Global Business Travel (Amex GBT).

• Hotel price rises have been driven by various factors, including economic growth in key regions and labour market dynamics.
• Specific cities such as New York and Stockholm are projected to witness distinct trends in hotel rate changes due to localised factors.
• The demand for personalised and sustainable hotel experiences influences pricing strategies, with technology playing a crucial role in operations.
• A strategic approach to sourcing and negotiation is recommended for businesses to navigate the evolving landscape of hotel pricing.

The outlook for 2025 suggests that global hotel rates will continue to rise, albeit at a slower pace compared to the steep increases witnessed in previous years. The American Express Global Business Travel’s (Amex GBT) Hotel Monitor 2025 report attributes this moderation to an easing in leisure travel demand along with an influx in new hotel developments. This insight draws from data gathered across more than 80 cities worldwide, factoring in economic variables such as those from the International Monetary Fund (IMF).

While the overall trend indicates moderation, some cities are exceptions to this pattern. New York continues to experience substantial rate hikes partly due to restrictions on short-term rental accommodations. In Europe, Nordic cities are projected to see significant increases, reflecting improved economic conditions anticipated in the coming year.

India’s robust economy continues to drive demand for both domestic and international travel, exerting upward pressure on hotel prices. The report also forecasts sustained high rates due to labour shortages and increasing wages, even as global inflation is predicted to decline.

Notably, the construction boom in hotel development is expected to expand supply significantly. Major growth is seen in regions such as the US, China, India, Canada, and Saudi Arabia. Technological advancements are transforming hotel operations, helping to mitigate labour shortages through AI-driven solutions such as automated room assignments which enhance personalised guest services.

The demand for customisable guest rooms is growing, with hotels offering in-room fitness facilities and wellness amenities. Sustainability efforts are intensifying, driven by data accessibility that aids in meeting corporate and individual environmental goals. The popularity of extended-stay properties is increasing, particularly in Asia, where there is a clear preference for flexible accommodation solutions.

Amex GBT’s consulting vice president, Dan Beauchamp, highlights the stabilisation in the travel market, emphasising the need for strategic, data-driven hotel sourcing decisions. He advises travel buyers to engage in creative negotiation practices to optimise corporate hotel programmes, such as leveraging various room types and exploring dynamic pricing models.

Forecasted increases for key business travel destinations include a 4.7% rise in New York, 4.2% in Las Vegas, and a notable 9% hike in both Bengaluru and Delhi. Other cities like Rio de Janeiro and Stockholm are expected to see increases of 5.2% and 5.6% respectively.

The projected easing of hotel rate rises in 2025 offers a more balanced outlook for the travel industry, despite ongoing challenges.