Why are hotel prices so high 2023?

Supply and demand imbalances aside, hotels are facing other challenges this year thanks in large part to persistently high inflation. “Hotels are faced with rising energy costs to heat and cool along with the rising cost of goods and services,” Hayley Berg, lead economist at Hopper, tells Money.



People Also Ask

If you thought 2022 was an expensive year to travel, get ready to spend even more in 2023. New data from travel site Hopper shows that U.S. hotel prices averaged $212 per night in January — that's 54% higher than the same month in 2022. Planning on taking a trip soon?

MORE DETAILS

Hotel Costs According to Hopper's Q1 2023 Consumer Travel Index, hotel rates within the U.S. average $212 per night this year.

MORE DETAILS

If you thought 2022 was an expensive year to travel, get ready to spend even more in 2023. New data from travel site Hopper shows that U.S. hotel prices averaged $212 per night in January — that's 54% higher than the same month in 2022. Planning on taking a trip soon?

MORE DETAILS

Hopper's analysis identifies two main factors that account for the sharp rise in hotel prices: High occupancy: As the travel industry rebounds in the aftermath of the COVID-19 pandemic, millions of people are vacationing again. Hopper is expecting high demand for hotel rooms throughout the year.

MORE DETAILS

CBRE's revised forecast projects 2023 RevPAR will be up 4.6 percent year over year to $96.64, which is down $1.25 from its previous forecast, issued in May. CBRE's softened RevPAR projections are partially attributed to decreased occupancy expectations and a decline in demand, according to the company.

MORE DETAILS

“We are going to continue to see room rates grow just below the level of inflation,” Freitag predicts—an expectation he and other experts say could continue even if the economy does enter a recession. Still, hotel rates are undeniably elevated right now.

MORE DETAILS

Tight supply: Hopper's report points out that right now, there are fewer hotel rooms under construction than there were before the pandemic thanks to lockdowns, supply chain snags and rising interest rates. When demand is high and supply is low, prices tend to rise.

MORE DETAILS

Depending on the type of Airbnb apartment and the hotel, Airbnb can be cheaper than hotels but can also be more expensive. In general, Airbnb is cheaper than hotels because Airbnb does not have to pay for the overhead costs of a hotel or the general management of such a large operation.

MORE DETAILS

Yes, you can permanently stay at a hotel, but it's often more expensive than traditional renting. Hotels may have policies limiting long stays, and local laws can affect this too. Hotels usually provide less space and fewer amenities than a home.

MORE DETAILS

Three years later, the world is adjusting again. While tech companies shed jobs in response to the state of the economy in 2023, the hospitality industry is now ready to hire in response to the expected increase in travel. One of the sectors that had the biggest job growth in December 2022 was travel and leisure.

MORE DETAILS

Generally speaking, it's best to plan to spend no more than 25-30% of your monthly income on a hotel room.

MORE DETAILS

Yes, you can often negotiate hotel prices. Directly call the hotel for potentially lower rates, ask about any discounts or package deals, be flexible with dates or room type, negotiate for longer stays, and ask if they can match lower prices found elsewhere. Always be polite and patient during negotiations.

MORE DETAILS

The best month to book hotels in the US is September. During the month of December, hotel bookings are 6% cheaper on average. The second cheapest month to book a hotel deal is March. Avoid October, as this is the most expensive time to book a hotel stateside.

MORE DETAILS

If you have a loyalty status with the chain then yes, it's probably cheaper to book directly. Also, sometimes hotel offer discounts to incentivize people to reserve with them in order to avoid paying fees to a 3rd party platform like Booking.com. But the reverse can also happen. So just check both and compare.

MORE DETAILS

With slowing growth in occupancies for the balance of this year, we now expect average daily room rates to increase 4.1 percent for the year, with resultant RevPAR up 5.5 percent – approximately 114 percent of pre-pandemic levels, on a nominal dollar basis.

MORE DETAILS

Generally, no. But that is assuming the check-in has reserved a room. If a walk-in happens late night (after midnight) and there are plenty of empty rooms, a modest discount would be in order if that's what it takes to secure the occupancy and added revenue.

MORE DETAILS