During the past few years, the recession has kept some people from traveling as much as they would like to. As a result, hotel rates have been staying fairly low, but they are creeping up again.
Key sign of recovery
Recessions not only make a mess of economic conditions, they also happen to be a real buzz-kill when it comes to vacation plans for a lot of people. Fewer people flew, or left home at all, and fewer people stayed in hotels and as a result, hotel rates stayed relatively low for both corporate and leisure travelers.
However, according to Time magazine, hotel rates have been slowly starting to creep back up, with a record increase in hotel rates being noted by Pegasus Solutions, a tech company that caters to the hotel industry, in June 2011, when hotel rates jumped by 7 percent for business travelers and 6.4 percent for leisure travelers. Hotel rates in 2011 went up worldwide, according to Yahoo News, as the Hotel Price Index maintained by Hotels.com noted a worldwide uptick of 4 percent, including a 5 percent increase for North America.
Pegasus, according to Time, has disclosed that hotel rates went up again in February.
Second month of rising rates
Single-month record rate increases were observed by Pegasus in January and February of this year, as business hotel rates went up in January 2012 by 7 percent compared to January 2011, according to TravelDailyNews. In February, according to Time, business hotel rates climbed by 7.1 percent, compared to February 2011. Hotel rates for recreational travelers rose by 7.3 percent.
Pegasus is mum on which hotels raised their rates and doesn’t release averages in dollar amounts, but the group is known to keep track of many of the biggest hotel chains, including Marriott, Radisson, Hilton, Holiday Inn and Omni hotels. Hotel analysis group STR Global, though, pegged the average hotel rate for the United States at $103.18 for February.
According to TravelDailyNews, the rate increases had a lot to do with increased bookings, as 5.1 percent more business travelers and 2.3 percent more leisure travelers booked a night in February. However, the extra day because of leap year contributed heavily, as leisure bookings would have been 1.6 percent less than February 2011 without Feb. 29.
Not all the way back
Despite large increases, according to Time, hotel rates are still down from several years ago. Pegasus estimates business hotel rates are still 2 percent below 2007 and 2008 rates and leisure rates are 10 percent down from that time.
Hotel rate increases are likely to be the norm for some time. According to USA Today, PKF Hospitality Research projects hotel rates to go up throughout 2012 and 2013, with rate increases to be more pronounced at luxury hotel chains. PKF anticipates the average daily rate for hotels will increase by 4.7 percent in 2012 and 5.3 percent in 2013.