And we’re not the only family of five suffering from hotel sticker shock.
According to a new report by STR Inc., a hospitality research firm, hotel rates in 2014 were the highest they’ve ever been, with an average of $115 per night – that’s a 4.6 percent climb. And rates are expected to rise an additional 5.2 percent by the end of this year.
In addition, according to a LA Times story, this year hotels will tack on guest charges, such as early check-in fees.
According to the STR report, New York City boasted the highest room rates in 2014, where hotel guests paid an average of $263 a night. The next three top-dollar locations: Oahu Island in Hawaii ($221 a night), San Francisco ($207) and Miami ($185). And Nashville, Denver and Atlanta were the hotspots for revenue growth in 2014.
Not surprisingly, higher-than-history hotel rates translate into unprecedented revenue for hotels. On average, they netted about $74 per room.
But even though hotels are earning more profit, guests shouldn’t expect a break, said Bjorn Hanson, dean of New York University’s Preston Robert Tisch Center for Hospitality, Tourism and Sports Management.
On the contrary, hotels may very well implement new fees this year, such as a charge for requesting a specific type of room, he said.
All this said, consumers don’t seem to mind, which is good news for event planners.
During 2014, hotels sold more rooms than ever (1.1 billion), according to Hotel News Now. In fact, the occupancy rate in 2014 rose 3.6 percent to 64.4 percent. Atlanta and Denver experienced the highest jumps in occupancy rates, according to the report.
“The U.S. hotel industry experienced a great year and ended 2014 on a positive note,” said Amanda Hite, president and COO of STR Inc. “The year’s performance broke several records thanks to continued strong demand.”
So what does this mean for your organization as it plans events for 2015? It looks like your guests could be paying more. The STR report indicated group rates rose as well, and with higher occupancy rates, it could be harder to book affordable rooms for your event.
All the more reason for your organization to take another look at the ROI of its events. If people will be forced to pay more for their rooms, they’ll want more from their programming – and perhaps expect you to offset the increase with a less expensive event.
Oh. And it seems three event hotbeds – Miami, Denver and Atlanta – may crimp your style. Will this lead to more events in smaller, less desirable cities? Time will tell, so stay tuned.