Sydney will become one of Asia Pacific’s toughest negotiating markets for business travellers over the next 12 months as hotel prices begin to rise amid the stabilising economy.
Egencia, the corporate arm of Expedia, described Sydney as “weak” in its 2010 hotel negotiability index with Melbourne branded moderate.
In other major centres across Asia Pacific, including Tokyo, Singapore, Hong Kong, Shanghai and Mumbai, the hotel negotiating environment for corporates remains favourable.
“With a few exceptions the hotel negotiation opportunity for travel and business decision makers is strong for 2010,” said Ken Pfaffmann, country director for Egencia Australia.
The index was included in the corporate agency’s 2010 forecast which globally predicted a rise in airfares but said hotel rates are likely to remain depressed.
But with Sydney’s occupancy levels faring better than many other cities in Asia Pacific, negotiations are likely to be tougher in the New South Wales capital, the report said, with average daily rates expected to rise 1%. Unlike many cities in the region, the lack of new developments in Sydney will also edge up prices.
However, the situation is reversed with airfares. Egencia said fares across much of Asia Pacific will climb 4% as airlines look to improve yields but tipped no increase from Sydney. Melbourne fares are forecast to rise 3%.
“Sydney will remain flat partly because of the competition across the Pacific which is continuing to place downward pressure on fares,” Pfaffmann said.
In North America, average air ticket prices are forecast to rise between 2% and 16% while hotel rates will continue to fall. In Europe, airfares will rise between 0% and 7%. Hotel rates will also increase.
