Along with food spikes and soaring energy bills, hotel prices are another victim of the inflation rampant throughout much of 2022. One calculation found that, between June 2019 and 2022, the average hotel stay soared by 226% in New York, 200% in Chicago and a respective 196% and 189% in Miami and Boston.
Putting aside expensive metropolises, another estimate found that hotel rates across the U.S. rose by 19% last year.
While overall demand for travel remains high, rising costs and fear of a recession have been putting some off traveling. According to Deloitte, only 31% of Americans planned to take a trip between Thanksgiving and mid-January while last year that number was at 42%.
Financial concerns were the primary reason for 37% of those who chose not to travel while a large portion of those who did so are waiting until prices stabilize before trying to plan.
Do Not Expect Hotel Stays At This Chain To Go Down Soon
While the consumer price index has been dropping for several months now and inflation is finally showing signs of slowing, this is not likely to translate into the "deals" or low hotel prices that some travelers may hope to see.
At the Americas Lodging Investment Summit in Los Angeles, Marriott (MAR) CEO Anthony Capuano told The Points Guy that the chain has been "elated at the pace at which group demand has recovered" from the pandemic and is unlikely to significantly lower prices by the summer.
"We're quite bullish," Capuano said. "We do not think we have tapped all of the pent-up demand that's out there for travel."
The one bit of reassuring news came in the reassurance that prices are also unlikely to continue soaring. Numbers shown at the conference predict a rate increase of just 2% (instead of last year's 19%) so travelers can expect to continue paying what they're seeing now.
Should You Be Investing In Hotel And Hospitality Stock?
While some have made a career out of scouring different aggregators and finding last-minute deals, Capuano still expects market prices to be driven by high numbers of people taking trips they have put off during the pandemic -- particularly in the summer.
"When we look at the data, we are obviously watching very, very closely all the economic trends, all the discussion of head winds [and] all the debate about the recessionary environment," Capuano said. "But we're not seeing it in the data yet."
Marriott shares are, in the last year, up nearly 8% at $169.72. While this isn't astronomical growth, it underscores the CEO's words about the hotel chain being in a very comfortable position even in a looming recession and not particularly likely to need to draw in visitors by discounting.
Data from the United Nations World Tourism Organization predicts that 2023 tourism will reach 85% to 90% of the levels seen in 2019 -- the higher numbers of travelers overall will make up for those spending less or shortening vacations as cost-cutting measures.
"Marriott has seen gains recently, climbing 11% over the past three weeks," Ed Ponsi writes for TheStreet's RealMoney. "But the stock is drifting within a symmetrical triangle (black lines), which has no directional bias. The charts of Hilton Worldwide Holdings (HLT) and Choice Hotels (CHH) have a similar look."
