Soaring commodity prices may push up hotel rates

Rising global costs of materials such as cotton to add to upward pressure

You don’t have to be in the textiles business to feel the increasing cost of cotton. Operators of well-known hotel brands are considering passing these costs on the guests.
The cost of guest-room essentials such as bed-sheets and towels means that, for Best Western, the world’s biggest hotel family, bath towels are up in price by 54%, while queen sheet-size bed linen that cost €52 for a set of 12 in 2010, now costs €84. For a company that prides itself on value, such costs are hard to absorb even if they are fairly nominal.
“New hotel construction, steel, raw materials and other inputs are going to draw down actual supply growth,” says one hotel executive. High oil prices will also cut into a hotel’s bottom line as they keep more travellers closer to home.
[pictured: BW Vilnius, Lithuania]