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UK hotel prices to rise 7 per cent in 2017

GBTA's 2017 Global Travel Price Outlook also reveals UK airfares to rise 2 per cent while group sizes increase 6 per cent

Pictured: UK hotel prices are predicted to increase 7 per cent in 2017, despite a large amount of hotel openings taking place this year

UK hotel prices are expected to increase 7 per cent in 2017 despite the current boom in hotel developments, with close to 8,000 rooms expected to be finished in London alone this year.

The forecast comes from the 2017 Global Travel Price Outlook, compiled by the Global Business Travel Association (GBTA) and Carlson Wagonlit Travel (CWT), which reveals UK hotels will see the highest price increase across Europe, the Middle East and Africa (EMEA). Sweden will see the second highest increase (4 per cent) while hotel prices will decline in Finland (-1 per cent), Russia (-2.6 per cent) and the Middle East and Africa (-0.5 per cent).

It comes after CBRE predicted hotel stock in Manchester and Edinburgh were growing by 11 per cent and 7 per cent in 2016, while London experiences a 6 per cent growth rate.

The 2017 Global Travel Price Outlook said impacts from mega hotel mergers such as Starwood-Marriott, which took place in November 2015, would not be felt until 2018.

"The United Kingdom continues to be the strongest corporate market in Europe despite additional supply built for the 2012 Olympics as well as an additional 12,000 rooms that have come online in 2016 thus far," report authors said.

"(Hotel mergers) are widely seen as an attempt by hotel chains to fight back against new competitors such as Airbnb and may prompt even more industry consolidation."

The outlook also predicts a 2 per cent increase to UK air fares, while group sizes will rise 6 per cent across EMEA. It adds that next year will be marred by uncertainty following the UK's vote to leave the European Union, saying: "The uncertainty will likely impact consumer and business confidence, impacting investments and employment. More immediate concerns include currency fluctuations and the devaluation of the pound sterling, which could make it more expensive for UK consumers when traveling or purchasing outside the UK as early as this year."

The report offers five recommendations for travel planning and budgets in 2017; drill deeper into data, monitor markets and suppliers' performance, be willing to make major programme changes, check your in-house technology and get your travellers on board with decisions.

Download the full report at the GBTA website.

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