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It wasn’t long ago when a $1,000-a-night hotel room was seen as an extravagance for the uber wealthy. With the current travel boom, that staggering figure will only get you a base room at some properties globally. Is this normal and when will priced come back down to Earth?
Bloomberg reported this week that “thanks to inflation, competition and aspiration, luxury travel has reached a new standard.” Looking at hotels in some of the world’s largest cities like Dubai, London, Paris, and New York, you’ll find dozens of luxe choices and many of them come with a price tag that equals what some folks pay for their monthly rent or mortgage.
The Straits Times writes that between 2019 and 2022, luxury hotel rates have been soaring. This includes a 35% increase in Europe and 28% in North America (based on data provided by CoStar Group, which is a hotel market researcher). This illustrates that revenge travel is not only continuing, but that travelers have gotten a taste of the good life and now they’re not backing down from plunking down their credit cards.
Many hotels have opened new locations in the past few years and even more have undergone extensive renovations. When you factor increased costs for labor, insurance, and just about everything else, it costs more to run a hotel than it did pre-pandemic. As a result, hoteliers are passing these costs onto their guests and shockingly, guests aren’t flinching.
Hotel occupancy is down from 2019, but it’s on the rise. CoStar Group says that hotel room occupancy in the United States was around 64.5% in 2002 and grew to 67.3% in 2023. Inflation is slowing in the US and UK and this will likely bolster spending even more.
Anthony’s Take: I’m thankful for miles and points because those aspirational hotel awards are becoming even more so. I have paid up to $1,500 a night. But, that was for an overwater bungalow in Bora Bora and not a hotel room in Mayfair. For city hotels, I try to cap things at $500 a night. This might not be possible in some cases going forward.
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