Hotel Rate Forecasts for Q1 2018

2018 is off to a strong start for hotels but what does that mean for business travelers and their companies’ lodging budgets? First, let’s take a closer look at what the hotel industry’s expert data analysts are forecasting.

Supply and Demand Outlook

A stronger economy will lead to more travel so room demand nationwide is expected to continue increasing to all-time high levels throughout the year. In response, the supply of hotel rooms will also increase as new hotels are being built which means the supply could outpace demand later in the year. Current hotel construction projects are more heavily concentrated in the top 25 markets with the majority of new hotel openings anticipated early in the year.

Last season’s hurricanes are still impacting hotel demand in the areas hit by the storms and occupancy levels will remain high for the next few months. This of course translates into higher room rates in those markets.

Probable Cost Increases

Leading industry analysts are predicting anywhere from a 1.9% increase (STR) to a 3.2% increase (CBRE Hotels’ Americas Research) in the average daily hotel rate during the first quarter. Hotel rates began trending upward last year and are expected to continue to rise throughout 2018.

The upside? A greater supply of hotel rooms in top 25 markets may help stabilize the rates later in the year in cities where hotels are typically the most expensive. Also, as hurricane ravaged areas continue to rebuild, hotel demand will decrease sometime during Q2 and rates in those areas should then begin to reflect the lower occupancy levels.

Managing Your Corporate Hotel Budget

With proper management, rising costs don’t have to derail your business travel budget. CLS’ corporate lodging management program saves clients thousands annually on hotel reservations and corporate apartments.

From negotiating rates to auditing folios and providing consolidated invoicing coded to each client’s specifications, CLS handles all the details to maximize client savings on every stay. Learn more about how we can help at

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