Nearly two of three Canadians is planning to travel internationally in the next little while. But hotel rates will continue to climb in 2024.
Two reports from different divisions of American Express provide valuable insights for both advisors and consumers. An AmEx Global Business Travel report says inflation could cause hotel prices to increase by double digits in cities such as Paris and Chicago, while slightly more modest hikes are expected in Canada. Another American Express report says 63% of Canadians plan to travel internationally this year, and that almost 80% of Canadian Gen Z’ers turn to social media for travel inspiration.
Here’s a look at more of what the two studies have to say.
AMEX TRENDEX REPORT: STRONG TRAVEL DEMAND AND SOCIAL MEDIA
American Express has released its Amex Trendex report, uncovering the latest trends shaping the industry. According to the report, Canadians are turning to social media and leveraging “travel hacks” while travelling and booking travel:
- Nearly 2 in 3 (63%) of Canadians plan to travel internationally this year and most (87%) have used a ‘travel hack’ in the past 6 months while travelling or booking travel
- Nearly half (47%) use a credit card with travel benefits (higher than the global average of 33%, and any other market surveyed)
- 40% choose a hotel that offers complimentary breakfast
- 37% travelled with carry-on only to avoid baggage fees (higher than the global average of 30%)
- Nearly half (42%) of Canadians turn to social media for travel inspiration, increasing to 79% amongst GenZers
- The most popular things Canadians look to social media for when trip planning are top things to do at their destination (49%), landmarks to visit (48%) and restaurant recommendations (46%)
- And when it comes to Millennials and GenZers, social media has impact on where they decide to go:
- 37% say they want to show off their travels to impress followers
- 28% say if they don’t post their travels to social media, they may as well have not happened
- 27% even plan their travels based on what’s going to impress their followers
The survey also found 65% of Canadians have a credit card that can be cashed in for travel rewards and among them, 76% keep track of how many points they have accumulated.
AMEX GLOBAL BUSINESS TRAVEL REPORT
After three rollercoaster years, hotel rates will continue to rise in most locations globally during 2024, according to a new report by American Express Global Business Travel (Amex GBT), the world’s leading B2B travel platform. The Hotel Monitor 2024 finds that most cities around the world should experience rate increases in line with local inflation, following the large price jumps in 2022 and 2023 fueled by a surge of so-called “revenge tourism” which helped inflate rates.
The report, which looks at hotel price trends in more than 80 major cities based on analysis of millions of hotel transactions and International Monetary Fund (IMF) economic data, offers predictions for top business travel destinations. Here are some projections for major cities.
CHICAGO: +12.6%
PARIS: +11%
BERLIN: +9.4%
LONDON: +9.1%
VANCOUVER: +8.9%
SHANGHAI: +8.4%
MONTREAL: +8.3%
SINGAPORE: +7.5%
NEW YORK: +6.8%
TORONTO: +6.7%
RECORD BREAKING RATES IN CANADA
According to the report, Canada’s hotel industry achieved record-breaking average daily rate (ADR) and revenue per available room (RevPAR) levels in 2023. Vancouver saw the country’s highest occupancy, at 89%.
A raft of new hotel construction projects across Canada was announced this year which will increase supply, putting downward pressure on rates. But new rooms may not arrive in significant numbers until later in 2024. Across the country, rates are expected to rise by about 7.8%.
THE BIG PICTURE ON PRICE MOVES
While global inflation is set to fall in 2024, it will continue to impact hotel costs, according to the report. A key factor here is staffing, with hotel wages in North America at record levels.
“Traditionally, low occupancy acted as a trigger for hotels to lower rates,” the report reads. “Today, hotels are happy with lower occupancy so long as they can raise their rates. This is especially the case in destinations where hotels cannot deploy their full inventory because of staff shortages.”
Analysts believe that leisure travel is likely to impact prices less as demand is now normalizing.
