How to Score a $200 Hotel Room for Less Than That
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Here's your Money Briefing for Monday, September 30th. I'm J.R. Whelan for The Wall Street Journal. How much are you willing to pay for a hotel room? $150? $170 a night? You better open your wallet a little wider. In the nation's largest cities, hotels are charging an average of $200 or more. And that's making a lot of travelers do some number crunching.
A lot more travelers are turning toward rewards and points for their stays, though of course they also say their points don't go as far as they used to. There are deals out there if you bundle your hotel stay with flights, but you need to be careful and read the fine print of those deals.
Our travel reporter Allison Poley will join us after the break.
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The price of a hotel room has skyrocketed, and in many cases, $200 a night is the new norm. Wall Street Journal travel reporter Alison Poley joins me. Alison, I'm old enough to remember getting a decent room for under $100. How much have hotel rates risen in the past several years?
By the double digits. So there's a few different markets we can look at to show just how much they've gone up.
How high have average hotel room rates climbed in the nation's largest cities?
So pre-pandemic to now, Tampa and Phoenix hotel rates have gone up 30%. Miami and New York City are up 21%. So across the board, in major cities, hotel rates are up dramatically compared to where they were five years ago, of course.
What's driven up those costs and why is the five-year marker significant?
The five-year marker is significant because it's pre-pandemic to now. So 2019 is when we think of a healthy travel demand. There were tons of leisure travelers going around paying the rates that were available. But of course, we're a long way since then in terms of inflation. So that's one of the reasons that the costs are changing. So inflation has driven up the cost for operators and they have to pay a lot more for travel. electricity and maintenance and all the costs associated with running the hotel not to mention labor so they're paying their workers more as well those costs get passed on to the traveler but of course there's also profit margins for these hotel companies and people are paying the rates so as long as the demand is up they are able to keep charging these amounts
These double-digit percentage increases, are we seeing this at all levels of hotels?
No, we're not. So it's not evenly spread. So with luxury hotels in particular... they're able to charge the most. The highest paying leisure traveler has been very resilient and has been able to stomach these higher rates. They're very motivated to take their trips in a way that people with less disposable income cannot be. So what we've seen is among the lowest tier hotels, their rates have been pretty flat over the past year and have even dropped a percentage point or two.
You were with us on the show earlier this month discussing how companies, including hotel companies, are making fees more transparent in the listed price. And anybody who's checked into a hotel knows that there are taxes and fees and such on the bill. Has the transparency of the fees helped people deal with the higher room rates?
In some ways, yes. But when we're talking about the room rate itself, that's where we see a lot of these big increases. And then the taxes and fees are on top of that. So hotel taxes are a percentage of the total room rate. And a lot of the fee transparency bills do not require taxes to be shown in the total initial price that travelers see. So that does mean that on the checkout page, they can be paying 10 to 15 percent
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