MADRID (Reuters) - Hotel room rates in Madrid are expected to rise at half the pace of those in Barcelona in 2024 thanks to a boom in hotel openings in the Spanish capital to meet surging tourist demand, according to a forecast by American Express (NYSE:AXP) Global Business Travel.
The annual survey expects room rates in Madrid to rise by 4.5%, while prices in Barcelona will increase by 9% next year.
Madrid's plan to attract a number of five-star hotels to compete in the high-end tourism sector, previously dominated in Europe by Paris, London and Milan, is bearing fruit even as Barcelona slips due to tougher building regulations.
Madrid will have more than 2,700 luxury hotel rooms by the end of 2023, up 50% from a decade ago, according to a report by commercial real estate services company JLL.
Spain's capital city has 33 new hotels in the pipeline, half of them in the upscale segment, compared with 13 projects in Barcelona, consultancy firm Colliers said in another report.
Supply has stalled in Barcelona after local authorities in 2017 banned the construction of new hotels in the city centre.
"Given that Madrid is booming and has a higher supply of hotels to meet demand, rates are lower than other regions such as Barcelona," Amex GBT said.
Hotel rates in cities such as Buenos Aires, Boston or Bangalore in India are expected to continue to rise by double-digit percentages, in line with local inflation and the continued surge in business and leisure travel after the pandemic, according to Amex GBT.
Rates at hotels in Paris and Chicago, among the cities ranked highest as business destinations, could rise 11% and 12.6% respectively next year.
The survey on hotel rates in more than 80 major cities is based on an analysis of millions of hotel transactions and International Monetary Fund (IMF) economic data.