Hoteliers juggle rate growth with service expectations

Guests are expecting the same fundamentals as before the pandemic, but the margin for error is smaller given the higher rates

Record-high room rates led the hotel industry’s recovery out of the pandemic as travel demand surged beyond 2019 levels in some segments. What jeopardizes this steady demand isn’t necessarily the higher cost of booking a hotel stay, but rather deteriorating customer service scores paired with the price.

Key takeaways

• "The traveler is becoming more unforgiving. You notice in those situations, I hear them complaining about rate combined with bad service or disappointing experience," according to IHG Hotels & Resorts COO Jay Caiafa;
• While the baby boomer generation prefers consistency in the Marriott and Hilton brands, younger generations lean toward unique experiences at independent and soft-branded hotels for, among other reasons, Instagram fodder;
• That's why you’re seeing brands like Autograph, Curio and Indigo, etc., be so successful for the brands is because they want ... unique and local.

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