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Corporate Hotel Rate Negotiations Expected to Spike, NYU Forecasts

Corporate contract rates will see an increase in 2016, according to a preliminary analysis by Bjorn Hanson, Ph.D., clinical professor at New York University (NYU) School of Professional studies.

The report says that the rate increase is the most since NYU began preparing this forecast, with a natural average of 6.5 to 7.5 percent. Depending on the outcome, this could be the largest increase since 1987. Average daily rate is expected to jump six percent this year.

A trend that has develop over the last five years is to charge separately for services amenities, instead of including the cost in room rates. This would include additional fees for the use of fitness centers and internet access, for example.

In response to daily rate increases, the report says buyers are reallocating their portfolios of contract rate hotels to include more upscale, select service, and limited service hotels instead of upper-upscale or full service hotels.

For the full report, click here.

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