Growing business travel demand, high occupancy expectations and stunted supply growth are creating difficult market conditions for travel managers in many of the top business travel cities.

As recent hotel negotiating generally proves tougher for buyers than in past years, some experts advised that market-by-market hotel deals could yield more beneficial results.

Like the U.S. lodging market at large, the top business travel markets are expected to see across-the-board growth in RevPAR—with growing rates and occupancy making major contributions.

Citing market-specific research reports issued this month by PKF Hospitality Research, executive managing director Mark Woodworth said that Los Angeles, Atlanta and Chicago are expected to be the fastest-growing RevPAR cities in 2006, while Denver, Dallas and Orlando are at or below national average projections. While all of the top business travel markets are in some phase of recovery, New York and Washington, D.C., already have surpassed 2000 occupancy and rate levels.

Woodworth said that occupancy and, more importantly, rate increases are driving the ongoing recovery for almost every market. "If you look at what makes up the RevPAR growth, in virtually all cases more than half of it is due to increases in room rate," Woodworth said. "The vast majority of markets are still in the recovery mode in terms of RevPAR. A few markets are arguably fully recovered—that's D.C. and New York," Woodworth said. "There are slower recovery markets—they would include Atlanta and Dallas and Denver."

Hilton vice president of business travel sales Denise Lodrige-Kover said, "You can only charge what the marketplace will bear." However, it looks as though the marketplaces in many of the top business travel destinations will bear higher-than-average rates for buyers.

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