The travel industry has changed dramatically since the pandemic. Looking at 2019 versus 2024, we’ve seen vast upticks in touchless technology and the ability to complete tasks (such as checking in) without talking with or even being near another human being. Many hotels have also used the pandemic as an opportunity to decrease housekeeping services even more than previously.
Travelers have also changed since the pandemic. Although “revenge travel” has decreased, people are apparently willing to spend more money on travel nowadays than they were 5 years ago. And, of course, the places they frequent are more than willing to keep their prices high.
Take hotels, for example
PC: Ritz-Carlton New York NoMad
Once people began to travel again, hotel prices began to surge. According to NASDAQ, hotel prices in 2019 averaged $274 per night. And although they decreased significantly in 2020, from 2021ish onward, hotel rates been rising by double digit percentages in many locations (Frommers, Oct. 2023).
Nowhere is that more obvious than the hotels that charge an average of $1,000 per night or more. Want to stay at the Ritz-Carlton New York NoMad during the first weekend in October this year? They currently charge $1,300 for a standard room. That weekend, a room at the Four Seasons Miami Surfside starts at $1,500. And if you’d rather go for a fall weekend in Hawaii, the new 1 Hotel Hanalei Bay on Kauai has rooms as low as $1,110. But only if you prepay.
CoStar recently studied the trend of hotels that are charging an average of $1000 per night, to see how many hotels are in that highest of echelons now, as opposed to pre-pandemic 2019.
Founded in 1987, (thanks, Wikipedia!). They say that the continued strong leisure demand of high-end travelers has kept inflated prices at high end hotels.
Hotels that charge $1K+ per night: 2019 vs 2024
PC: Four Seasons Hotel at the Surf Club
CoStar reports that during the first 6 months of 2019, roughly 150 hotels around the world reported having an ADR (average daily rate) of over $1000. In the first half of 2024? 460 hotels can boast of being in the $1K+ ADR club.
Apparently, revenge travel remains, but it’s changed. Nowadays, instead of everyone wanting to go everywhere, the biggest spenders tend to be larger family groups, which demand more multi-bedroom suites. Those, of course, cost more. But no worries…these luxury travelers are used to shelling out that kind of money and have no qualms about doing so now.
From CoStar:
The ADR is an average for all rooms sold and implies that hoteliers can command even higher rates on certain nights and for certain room types. Traditionally, this was true for suites and connected rooms. Anecdotally, hotel operators have reported that in 2020, many of their guests felt unable or unwilling to travel and that in the following years, they wanted to make up for lost time. In addition, the strong desire to be with loved ones and family members gave rise to multigenerational trips, requiring more and larger accommodations. This allowed operators to yield the more desirable room types such as suites with multiple bedrooms.
The ten countries that have seen the highest increase of hotels with $1,000 ADR from January through June (2019 vs. 2024) include (Note: numbers approximated via a graph, may be 1-2 higher or lower):
- United States
2019: 22 hotels // 2024: 80 hotels - Italy
2019: 17 hotels // 2024: 70 hotels - France
2019: 22 hotels // 2024: 45 hotels - The Maldives
2019: 13 hotels // 2024: 25 hotels - Switzerland
2019: 5 hotels // 2024: 24 hotels - Mexico
2019: 5 hotels // 2024: 23 hotels - United Kingdom
2019: 7 hotels // 2024: 20 hotels - Japan
2019: 7 hotels // 2024: 18 hotels - Spain
2019: 0 hotels // 2024: 9 hotels - Thailand
2019: 6 hotels // 2024: 8 hotels
Analysis
PC: 1 Hotel Hanalei Bay
The United States has had the largest increase in hotels with $1000 ARD, from 22 in 2019 to 80 in 2024.
Of the ten countries that have seen the highest growth of hotels with $1000 ARD, five of them are in Europe (Italy, France, Switzerland, United Kingdom and Spain). CoStar feels this is due to U.S. citizens’ wishes to travel to Europe in 2023 and 2024, as well as the strong U.S. dollar. On top of that, Switzerland, the U.K. and Spain have always had a strong consumer base of higher-end leisure travelers, especially from the Middle East.
CoStar suggests the number of hotels charging this much is actually higher than what they report because some smaller luxury hotels and chains don’t share that sort of data. However, CoStar strongly believes the growth of luxury travel isn’t over. People with money to spend are still spending, and with it, hotels with $1000 ADR will continue to increase globally.
PC: Hotel President Wilson in Geneva, Switzerland (Penthouse Suite, $65,000/night)
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