Did hotel rates rise too far, too fast?

A few interesting numbers here from our friends at Smith Travel Research. These are average daily room rates for all U.S. hotels through September (green) and for the year (blue).

Notice anything?

Room rates held relatively steady in the 1980s — around $50, give or take a few bucks — but then started to climb in the 90s. By 2000, the average daily room rate had hit $84.

Prices continued to rise during the first decade of the 21st century, topping out at $108 in 2008. Then the recession hit, and rates fell, recovering somewhat for the first nine months of this year, but still $7 off their highs.

The inflation rate is a far gentler slope. Just look at the last decade.

Here’s the Consumer Price Index during the same period.

Have hotel rates risen too far, too fast? Maybe.

A better question, if your’re a guest, is: How high can they go? Will we see average daily rates of $200 in the next decade? (I’m sure the hotel industry would love that.)

The way I look at it, hotel rates are just adjusting to where they should be, and they may not be done adjusting.

But if the industry has its way, any future movement will be upward. Nothing wrong with that, of course, but definitely something to be aware of.

(Note: I generated these charts myself, but am by no means a professional. If there’s someone out there who has some expertise in Excel, Numbers or infographics, I could sure use your help on the next set of charts.)

Christopher Elliott

Christopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or check out his adventures on his family adventure travel site. Contact him at chris@elliott.org. Read more of Christopher's articles here.

%d bloggers like this:
Get smart. Sign up for the newsletter.