Price-Sensitive consumers 'trade down' on hotels

There are indications that leisure travelers are starting to cut back on their vacation expenditures due to the surge in hotel rates

Sep 12, 2023

In response to high inflation, the hotel industry can swiftly adjust by raising nightly rates to maximize profits, even if some rooms go unoccupied. Conversely, consumers may be altering their booking habits to seek better value, opting for more budget-friendly hotel choices compared to their usual preferences.

Key takeaways

  • Travelers are opting for budget-friendly hotels in the same area or looking for accommodations outside busy city centers;
  • Customers may shorten their trips, adjust flight and car rental plans, or consider alternative destinations;
  • Expedia notes that travelers initially considering Miami Beach hotels are expanding their search to other Florida destinations, likely to save on room rates and reallocate their travel budget.

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