Hotel rates may keep rising
Hotel room rates in the U.S. and Europe are rising and may get even more expensive as supply has failed to keep up with demand
U.S. hotel room supply is barely growing as tighter lending standards from regional banks make it harder for developers to secure funding, even as travel demand has grown after the pandemic. This is helping to sustain higher prices that executives say should have been reached years ago.
Key takeaways
- The number of U.S. hotel rooms increased about 3% in April of 2023 from the same month in 2019. Some 153,000 hotel rooms were under construction in April of 2023, down from a peak of 220,000 in the same month in 2020, according to STR;
- U.S. hotel rates in May averaged $157.45 a night, up 17% from the same month in 2019. Rates dropped to $73.25 in April 2020 during the pandemic and did not consistently rise above $100 again until March 2021, STR data show;
- Higher rates, however, may be discouraging consumers from booking hotels, as U.S. hotel booking data shows three consecutive months of negative year-over-year growth.
Get the full story at Reuters