New York takes the crown for being the world’s most expensive city for business trips due to high demand for hotels in the city, according to a new report by ECA International.
Text: Lois Hoyal // FOTOS: iStock
Start spreading the news,” as the famous “New York, New York” song goes: the Big Apple is once again the most expensive city in the world when it comes to business travel, retaining its top spot from last year, according to a new report by global mobility experts ECA International. And the reason is New York’s pricey hotel rooms, according to ECA Production Manager Steven Kilfedder.
“A big proportion of the cost of business travel to New York can be attributed to the high demand for hotels in the city with a room costing around US $500 on average. These costs in combination with consistently high prices for transport and at many restaurants can make trips to the city extremely expensive, contributing to the city being ranked the most expensive in the world for business travel.”
As well as the average costs for four-star hotel accommodation, ECA’s report examines the costs of meals, drinks, laundry, taxi journeys and daily essentials. A trip to New York, for example, including accommodation and all the extras costs $799 a day on average. Companies then use the information to anticipate the cost of employees’ business trips.
Business travel in Switzerland is still the most expensive in Europe, with Geneva taking the number two spot on the ranking, Zurich number three and four Swiss cities appearing in the top ten.
Iceland’s capital Reykjavik made a surprise leap up the list, with an average business trip now costing $615, up $50 in a year. This places Reykjavik ahead of cities such as London and makes it the fourth most expensive city in Europe for business travel. Meanwhile, business travel costs in London, Aberdeen, and other UK cities has declined, the report noted.
In Asia, Hong Kong remains the most expensive location for business travel for the second consecutive year, with hotel costs of $286. A low supply of suitable rooms for business travellers has enabled hoteliers there to push up prices.
So just how can hoteliers capitalise from running a hotel in one of these top 10 locations? With so much commerce travelling through cities, a solid sourcing strategy becomes vital. Fortunately, HRS has managed to capture a great deal of corporate custom by negotiating special corporate discounts at more than 1,000 properties. These discounts, ranging from 5% to 30%, are available exclusively to HRS clients, making HRS partner hotels far more attractive to executives travelling to these cities.
Do travellers find the prices just too prohibitive though? Apparently not, according to Ueli Heer, spokesman for the Zurich Tourist Board. “We don’t believe that Zurich, as an expensive city, will suffer any disadvantages in terms of business travel. On the contrary, experience shows that congresses in Zurich often have more participants than the same congresses in other cities.”
In Heer’s opinion, there may be various reasons for Zurich’s popularity despite the high prices. “For those planning business trips, the focus often isn’t on prices but on a city’s good connection to the airport, the choice of premises, leisure facilities, proximity to nature etc.”
In addition, Zurich boasts low VAT compared with other countries and has plenty of money available for sponsoring events.
“There are two sides to every coin,” Heer said. “Zurich can be a rather expensive city to travel to but on the other hand, it could be a reason why Zurich has no problem with excess tourism.”
According to Martin von Moos, president of Zurich Hoteliers, hotels in expensive cities like Zurich should focus on delivering higher quality to compensate for the higher costs. “Hotels in Switzerland have higher real estate values and higher food costs than in the rest of Europe because we’re not part of the EU, so a hotel in Switzerland has much higher basic costs. Basically we have no choice – we cannot be cheaper, we just have to be better and deliver higher quality in food, hospitality and services and security. We need to do this – we know that we are expensive but our service needs to be better, that is our motto.”
As well as carefully managing your costs, hotels in expensive cities need to market their strengths and their city’s strengths, von Moos continued. “Switzerland in general is expensive but we have a good public transport system, a very high level of security and an attractive tax system so it balances itself out.”