In the hospitality industry, size matters. A record $24.8 billion worth of hotel mergers were consummated last year, and the new megachains raised room rates simultaneously.
Pannel Kerr Forster Consulting (PKF), a San Francisco-based hotel and hospitality consulting firm, reports that the average business travel hotel rate climbed to $105.76 last year, up 7.7 percent from the previous year.
The price hikes are not coincidental. In dense metropolitan areas like Chicago, New York City and San Francisco, the hotel mergers have definitely affected prices, says Robert Mandelbaum, research director at PKF. "The potential is there for aggressive rate growth when many hotels in one area are owned by the same company," he explains.
But it's not all bad news for business travelers. Coopers & Lybrand LLP analyst Bjorn Hanson predicts mergers will benefit business travelers by generating frequent-guest programs that allow them to earn miles at more properties.
Christopher Elliott is an Orlando, Fla., writer and independent producer who specializes in technology, travel and mobile computing. His work has appeared in numerous newspapers, magazines and online. You can find out more about him on his website or sign up for his free weekly newsletter.