Going Up?
Price hikes accompany hotel mergers.
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.
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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.
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