Hotels Are Charging More While Holiday Travelers Plan to Spend Less

The U.S. hotel market is splitting in two. Travelers Today reported on November 5 that average daily rates for luxury hotels rose 6.8 percent in the third quarter, while economy rates slipped 0.1 percent. Hilton’s third-quarter results, filed October 27, showed U.S. revenue per available room up 7 percent, and the company raised its full-year guidance.

Guests are responding by trimming budgets. A PwC report released in early November says holiday travelers plan to spend about 24 percent less on lodging between Thanksgiving and New Year’s, averaging $419 per person, and 38 percent of those booking are choosing budget or midrange properties. In New York, CoStar data cited in the story put September’s average nightly rate at a record $468.54.

Hotels say they are squeezed too. The American Hotel & Lodging Association says operating costs are rising about four times as fast as revenue, with insurance premiums up 111 percent between 2019 and 2025. The article also notes that resort and amenity fees can add $15 to $50 per night, and that booking directly or through a loyalty program can avoid some third-party commissions.

The takeaway for holiday planners is to compare the total price, not just the headline rate, and to expect little relief at the top end of the market. Midrange and economy properties have more room to bargain, so flexible dates and direct bookings are the most reliable tools for keeping a lodging budget in check.

Sources: Travelers Today