The latest data from HotelHub has revealed a significant acceleration in hotel rate inflation, with the global average daily rate rising by 7.17% year-on-year to $189.
This follows a period of relatively flat growth in 2025 and comes amid shifting geopolitical conditions and trade policies.
Europe recorded the most substantial increases, with average rates jumping 13.88% to $175 per night.
Several key business hubs saw even higher inflation, including Milan (29.29%), Stockholm (22.11%) and Amsterdam (18.62%).
In the US, rates rose 7.61% to an average of $226, while booking volumes for the region fell by nearly 12%, representing over $27 million in lost hotel spend.
Despite these price increases, data suggests business travellers are maintaining their preferred standards of accommodation. Bookings at five-star properties rose slightly to 12.13%, while four and three-star reservations remained stable at approximately 45% and 38% respectively.
To manage budgets, travellers appear to be adjusting other aspects of their trips. The average length of stay fell rom 2.5 days in Q1 2025 to 2.43 days, limiting the increase in average spend per booking to 4.62%.
There is also evidence of regional shifts; in the UK, bookings in London fell by 5.24% while Manchester saw a 9.30% increase, where average rates of 160 are roughly half those of the capital (324).
Paul Raymond, Chief Commercial Officer at HotelHub, said: “The growing instability over the last few months has not produced favourable conditions for business travellers and, while this dataset only covers the first few weeks of the latest hostilities in the Middle East, it seems unlikely that things will get easier in Q2. For me, however, the real takeaway here is how travellers are negotiating the current situation. The business world is still moving: it’s just finding savvier ways to make budgets stretch – whether that’s compressing trips into fewer days or shifting to more affordable destinations.”
The report also highlighted the impact of the Iran conflict, which began in late February 2026.
Bookings to the United Arab Emirates fell by nearly 77% in March compared to the same period last year.
Conversely, growth was recorded in other markets, with hotel bookings increasing in Canada (5.16%), Australia (4.30%) and China (4.20%).
