Newport International Group
New travel story: The rise of the mega-city
When it comes to tourism, bigger really is better. The world's mega-cities continue to outpace the rest of the world by attracting leisure, corporate and meetings travel.
A new study of the hotel industry from Hogg Robinson Group found that interesting new twist to the tourism story.
Like diversifying your investment folio, the combination of leisure, corporate, and conference and exhibition traffic helps the mega-cities rise above the normal ebb and flow of market trends, and allows them to win (read, raise rates) no matter what happens in the general economy.
Eleven of the top 50 cities by room rate are classified as megacities, "and we are clearly beginning to see some marked differences between these and other cities that are popular business destinations," said Margaret Bowler, HRG director of global hotel relations.
"With the advantage of being able to cater for a variety of requirements, megacities can attract a more diverse range of business," she noted. "Other cities that are simply popular business destinations are subject to the general trend of the market and the consequences of wider economic pressures that would influence fluctuations in demand."
Bowler noted that "clients need to be aware of the rise of the megacity and the impact this growth pattern and dynamic has on their hotel spend." In other words (surprise!), sleeping in a mega-city costs more, and rates there rise faster.
That trend helped make New York hotels the world's top performers last year. Average room rates were buoyed by higher corporate demand from the financial and banking sectors as well as meetings and leisure travelers, despite new hotel openings that added to inventory.