As the summer vacation season approaches, travelers should prepare to pay more than they did last year for lodging.
That’s according to Jan Freitag, a senior executive at hotel industry tracker STR, who gives Hotel Check-In readers the scoop on hotel rates once a quarter. Freitag in his own words:
(Photo: Eric Risberg, AP)
Consumers should brace themselves to spend more for hotel rooms in popular destinations this summer.San Francisco and New Orleans lead the pack in terms of room rate growth. Hotels in both cities report double-digit increases (see chart below) for transient travelers.
San Francisco is such a hot leisure and meetings market that its group room rates increased by nearly 10%. Rates are increasing so much that travelers are looking across the Bay Bridge to Oakland and south, to San Jose, for more affordable accommodations. Rates in those areas have been rising, too.
New Orleans, a perennial favorite of meeting planners, is continuing to rebound after Hurricane Katrina. Given robust bookings for meetings and events, when transient travelers come to the city, they’re finding fairly full hotels and paying more. Rates in New Orleans are also up by about 10%.
Despite a steady influx of new hotels (such as the Quin and Refinery boutique hotels), New York City continues to be the room-rate leader for both transient and group rooms. In fact, group rooms in New York ($314 a night) are almost $100 higher than group rooms in the second most expensive city, San Francisco ($218 a night).
Washington D.C.: Becoming more affordable
The notable exception is Washington, D.C., where the lack of meetings and decreased government travel translates into declining room demand and rates. That bodes well for leisure travelers who will be more likely to find a deal when visiting the nation’s capital.
For the remainder of 2013 and 2014, Smith Travel Research expects rate increases to continue.
We forecast that transient and group room rates will both go up, with transient room rates leading the way with higher increases. This bodes well for the hotel operators, but will make bargains harder to find for the leisure traveler.
At STR we differentiate between groups sold in blocks of 10 or more (so called group rooms) and rooms sold in increments between 1 and 9 (so called transient rates). The following table shows the dollar amount hotels in select cities were charging in the first quarter of this year. The table also shows by what percentage the current room rates are higher (or lower) than they were in the first quarter of 2012.
Average Daily Rate Q1 2013 (transient), % Change from Q1 2012
Atlanta $133 +2.5%
Chicago $168 +5.8%
Dallas $139 +2.7%
Los Angeles $201 +6.8%
Miami $247 7.6%
New Orleans $170 +10.3%
New York $322 +2.6%
Orlando $144 +2%
San Francisco $221 +10.6%
Washington, D.C. $188 -0.6%
Top 25 Market Subtotal $195.01 4.7%