Hotel prices are rising as the demand for travel increases
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If you are thinking of booking the hotel stay that you have postponed since the pandemic started, you may want to reserve a room right away.
Night rates, while still a little lower than a year ago, are slowly rising to match or – in some popular destinations – exceed pre-pandemic rates, according to Koddi, a travel booking technology company.
In the last 30 to 45 days, average hotel prices have risen noticeably and are only 5% below the previous year’s figure, says Deep Kohli, Senior Director Client Services at the Fort Worth, Texas-based company. A few weeks earlier they were up to 11% cheaper.
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“We anticipate it will increase due to the increase in demand for summer travel,” said Kohli, adding that as demand increases, Koddi will see airfares rise in line with hotel prices. In the week of April 11th, US hotel demand rose 13.7%, making it the second highest level of the year. It had peaked for spring break travel in March.
According to Koddi, there is a correlation between vaccination rates and interest in travel.
“In the US, we are seeing a persistent correlation between regions with comparatively high numbers of vaccinations per 100 people compared to restoration of travel intent and travel requirement for those areas,” a company spokesman said in a statement.
Kohli said accommodations in areas of high demand – near beaches and national parks, for example – are now above pre-Covid levels, although major metropolitan areas like New York and Chicago are still seeing low rates due to slower recovery.
In fact, the Las Vegas Convention and Visitors Authority reports that the average daily rate at Vegas hotels, along with those in Laughlin and Mesquite, Nevada, was $ 100.11 in March. While that’s a 2.1% increase from February, it’s still down 25% from March 2019. While the visitor volume decreased by 39.7% compared to March 2019, it increased by 45.7% compared to the previous year.
General demand across the country is likely to continue to rise as a “normal seasonal increase” occurs from May to August, according to Koddi. The company also found that bookings for more than 31 days are starting to surpass historical levels, the cancellation rate for those bookings is dropping, and travelers seem willing to spend more on accommodations.
Indeed, hotel and resort prices are rebounding, despite the industry migration to vacation rentals in the Airbnb era, which often offers more privacy and fewer concerns about cleanliness and exposure to pathogens. Kohli said while vacation rentals will continue to be popular, “hotels are coming back”. In fact, hotel occupancy levels near these popular beaches and national parks are at record levels, he added.
“In general, economy and long term hotels have weathered the pandemic better, but we are seeing midsize hotels recover well and confidence in travel continues to grow, with restrictions easing and the upscale [hotel] and demand for resorts will improve, “said Kohli.
US housing of all types is in greater demand and possibly at higher prices than if most international markets were open.
Many normally popular overseas travel destinations have been closed to Americans for more than a year (Mexico was a notable exception), though the European Union warned this week that fully vaccinated U.S. citizens may soon be able to visit the 27-nation block.
Broader geographic access won’t have a big impact on rates, however, Kohli said, noting that domestic travel accounted for 80% of pre-pandemic demand.
“With the worldwide bans and travel restrictions last year, all demand was directed only to domestic destinations, but at a significantly subdued level,” he said. “We continue to see shifts as more international destinations open, some from national to these newly opened international destinations, or from one international region to another.”