Along with soaring food prices and soaring energy bills, hotel prices are another victim of rampant inflation throughout most of 2022. One account found that between June 2019 and 2022, the average hotel stay increased by 226% in New York, and 200% in Chicago . and 196% and 189% in Miami and Boston.
Expensive megacities aside, another estimate found that hotel rates across the US rose 19% last year.
While the overall demand for travel remains high, rising costs and fear of recession have put a damper on travel. According to Deloitte, only 31% of Americans planned to take a trip between Thanksgiving and mid-January, while last year that number was 42%.
Financial concerns were the main reason for 37% of those who chose not to travel while a large portion of those who did wait for prices to stabilize before attempting to plan.
Don’t expect this chain stay hotel to go down so soon
And while the consumer price index has been declining for several months and inflation is finally showing signs of slowing, this is unlikely to translate into “bargains” or lower hotel rates some travelers might hope to see.
At the Americas Lodging Investment Summit in Los Angeles, Marriott (March) – Get a free report CEO Anthony Capuano told The Points Guy that the chain has “cheered at the pace at which group demand has recovered” from the pandemic and is unlikely to cut prices significantly by summer.
“We’re very optimistic,” said Capuano. “We don’t think we’ve exploited all of the pent-up demand out there for travel.”
The reassuring news came in as reassurance that prices are unlikely to continue rising. The figures shown at the conference project a rate increase of just 2% (instead of 19% last year) so travelers can expect to continue paying for what they see now.
Should you invest in hotel and hospitality stocks?
While some have had success sifting through various pools and finding last-minute deals, Capuano still expects market rates to be driven by large numbers of people taking trips they’ve put off during the pandemic — especially in the summer.
“When we look at the data, we’re obviously watching very closely all the economic trends, all the discussions about strong winds [and] All the controversy is about the recessionary environment, Capuano said. But we haven’t seen it in the data yet.
Last year, shares of Marriott rose nearly 8% to $169.72. While this isn’t astronomical growth, it confirms the CEO’s words about the hotel chain being very comfortably positioned even in a looming recession and not particularly likely to need to attract visitors through discounting.
Data from the United Nations World Tourism Organization expects tourism in 2023 to reach 85% to 90% of levels seen in 2019 – and higher numbers of travelers will generally compensate those taking fewer holidays or shortening them as cost-cutting measures.
“Marriott has seen gains lately, jumping 11% over the past three weeks,” RealMoney’s Ed Ponsi writes at TheStreet. But the stock is drifting inside a symmetrical triangle (black lines), which has no directional bias. Hilton Worldwide Holdings Charts (HLT) – Get a free report and Choice Hotels (CHH) – Get a free report You have a similar look.”