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Which Way is Luxury Hotel Pricing Going in 2023?

Hospitality leaders say luxury hotel pricing is going back up, but they will need to improve their attention to service to see continued growth.
There’s nothing points and miles enthusiasts love more than getting a luxury hotel at a great deal. Will pricing stay comparatively low for 2023?


At Skift Global Forum East, Bernstein Research managing director Richard Clarke projected prices will continue to increase but could do even better business with bespoke experiences.


Pricing to Increase as Luxury Travelers Come Back

Using data from hospitality analysis firm STR, luxury pricing is increasing in line with a trend interrupted by the Great Recession of 2009. Luxury hotel prices are expected to rise to around 110% of current upper upscale prices.


Part of the reason is that luxury customers, who generally have more money and have no problem spending despite economic conditions, were only stopped by the COVID-19 pandemic. The other part is that luxury hotels are a comparative value when priced against other high-end goods.


“Even though every survey will tell you that luxury consumers want to spend more money on experiences, not less, we haven’t seen that catch-up come through in market share,” Clarke told the Skift Global Forum East. “If you look at luxury lodging as a percentage of the luxury market, you see there’s plenty of upsides to come.”


Although prices are projected to rise, there are reasons to be skeptical about paying more in cash or points. Hotel investment companies are betting more on luxury travel, developing new top-end properties. Clarke points to Marriott, which currently has 35 luxury hotels in development to join their portfolio of around 500 destinations.


The definition of luxury may change as well, as some properties add scarcity to their allure. For example, the members-only Soho House currently has a long waitlist for new guests to join their ranks.


Hotels Slowly Shift Focus from Opulence to Experience

The shift away from opulence to experience isn’t new for the hospitality industry. In October 2022, Hilton announced a partnership with Peloton to start bringing the digital workout bikes to their properties, with every U.S. property to get at least one.


Share your tips for getting the most out of your hotel experience on the FlyerTalk forums.

Sydneyberlin January 13, 2023

The biggest problem in the luxury segment is that staffing levels and the resulting service has still not been fixed. Observed this in the US as well as elsewhere in the world. And if you don't get decent service, you're less likely to fork out your hard earned cash or points for a luxury hotel. Something has to give.

cryoem December 27, 2022

this figure is about luxury hotel?

MarshKing December 24, 2022

I fear that there's a game of telephone going on here. Swift seemingly tried to summarize what was probably a research-dense presentation, and now flyertalk is trying to summarize the summary. 

If I am looking at the data from the presentation correctly, it seems to show that the premium charged by luxury hotels (over upper upscale properties) shot up during the pandemic. But that big spike is coming down - it's not clear how far down it will come before leveling back off. 

Looking at the 30-years of hisorical data, it seems that the rates at luxury hotels were around 45% higher than the rates of upper upscale hotels in 1990. By 2000, the difference increased to nearly 70%.

The slope of that trend line continued until the 2008/2009 financial crisis, when the % delta between upper upscale hotel rates and luxury hotel rates dipped. Interestingly, it looks like the slope may have actually stayed (roughly) the same after the 2008/2009 dip. It will be interesting to see where the line goes over the next few years. 

Something to consider - the % delta could increase even if luxury hotel rates go down. It would simply require that the upper upscale rates decrease at a faster rate. 

pstm91 December 23, 2022

"Will pricing stay comparatively low for 2023?" Huh??? Rates at luxury properties were on average 30-40% more than the previous all-time highs in 2019 (Google and you will get numerous sources reporting that). Yes, there were deals to be had, but overall pricing was astronomical this year, especially at the top properties given that demand has been insane. 

The one place I expect to see deals routinely - Doha - now that there are a plethora of luxury hotels to choose from and I can't imagine that many travelers (who aren't just there on a layover)...

not2017 December 22, 2022

Luxury hotels value? This past year, all luxury hotels raised prices to exorbitant levels. Many hotels that were in the $500 range, are now closer to $1K per night! It is pure price gouging at its best. Why do hotel chains think that the affluent are not price conscious? Not everyone is Elon Musk!

There needs to be an attitude change on Flyertalk. We use miles/points to save our money. Pumping luxury hotels as a better value is pure bunk!