Hotel rates start to increase again, according to Amex

This article presents the results of the Q3 American Express Business Travel Monitor (BTM) for North America. This analysis tracks paid hotel, airfares, rental car rates in key business travel markets.

I thought this article is interesting for at least three main reasons.
Firstly, we can see there is a slight increase in airfares and hotel rates paid. Or at least the decrease is slowing down. This is positive information for the actors in hospitality industry. We know there is a strong relationship between demand and prices. Due to the economic slowdown and the drop of demand, prices fell down. But Amex noticed there is a reversal on its domestic market. As a consequence we may think these last months shown us a reversal of the economic situation with the comeback of a small economic growth.

Secondly, the US are the world economic leaders. When the situation is fine in the US, everything goes pretty well everywhere else. Their power is so huge that their demand creates opportunities and wealth all around the world. And the economic crisis is the perfect illustration. The collapse of some of the main US banks had repercussions all around the world. But Amex is telling us good news. The demand slowly increases in the US, so we may thing it will raise soon in other countries.

Thirdly, this article is interesting because it gives us a new type of indicator of the economic situation. But this indicator is less formal than official ones. Usually, to measure the health of the economy we use indicator like GNP, or the evolution of market indexes. But there are other type types of indicator that can help us having a wider vision of the situation. For example we can use the turnover or the number of order received by companies manufacturing cardboard boxes to have an idea of the situation in the industry. If these companies’ turnover is increasing, we can reasonably think that the economy is doing pretty well because most of the products we buy have cardboard packaging. A huge need of packaging means a vigorous economy. It’s the same with the BTM index. It is not official but it gives another point of view.

Finally, this article gives us a last info: hotel rates continue to decrease in upscale categories. This means a demand reduction. During the last months we have seen that companies and individuals were less disposed to show big expenses, nowadays it’s no right-on. But we could consider that the economic situation would have come back to a normal level when people and companies would buy again upscale airline tickets and book in high-end hotels.

http://www.hotelmarketing.com/index.php/content/article/hotel_rates_start_to_increase_again_according_to_amex/