Inflation in the U.S. and escalating lux hotel costs?
#16
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Join Date: Feb 2022
Posts: 853
Essentially all medium to high end hotels and resorts are "government approved", (SHA) and well versed at arranging for the test on arrival.
Also, May 1st test on arrival becomes ATK so essentially instant results.
They've scrapped pre-departure testing so that makes up for the inconvenience of a test on arrival.
#17
Join Date: Jun 2008
Posts: 2,203
I am taking my nephew to Europe in June - usual stuff. I am not even looking at anything close to luxury, and I can't believe the rates for the properties where I would supposedly receive elite benefits, i.e. Hilton, Marriott. Not worth counting on those benefits. Likely heading to the Airbnb/VBO route; finding decent properties at reasonable rates.
#18
Join Date: Feb 2007
Posts: 148
We had a US trip fully priced and booked for January 2021, which was cancelled due to COVID. We have now attempted to recreate the trip for January 2023 and I am astounded by the prices. In my case add business class flights from Australia and not the best exchange rate and it is not justifiable.
Specific changes (confirmed rates for same dates):
- FS Vail - $685 (2021) - $2100 (2023)
- FS Orlando - $900 (2021) - $1700 (2023)
Specific changes (confirmed rates for same dates):
- FS Vail - $685 (2021) - $2100 (2023)
- FS Orlando - $900 (2021) - $1700 (2023)
#19
Join Date: Feb 2008
Location: In the air
Programs: Hyatt Globalist, Bonvoy LT Plat, Hilton Gold, GHA Tit, BA Gold, Turkish Elite
Posts: 8,718
And thanks to those restrictions which are essentially dealt with in 5min and $100, I can have what would be a $40,000 holiday in the US for about $3,000 in Thailand.
#20
Join Date: Jan 2013
Location: UK
Posts: 1,644
One of the many factors which push up prices in Europe are the various employment laws and minimum wage requirements for hospitality staff. There is currently a major despite about this in the UK regarding ferry operator P&O. I am led to believe that employment law as we recognise it in the UK and Europe does not apply to US hospitality sectors where staff, such as front line hotel and restaurant waiters etc, are paid the absolute minimum which requires them to rely on tips to make a living. Consequently the huge increase in US room rates can only be regarded as profiteering in times of uncertainty.
#21
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Join Date: Feb 2022
Posts: 853
One of the many factors which push up prices in Europe are the various employment laws and minimum wage requirements for hospitality staff. There is currently a major despite about this in the UK regarding ferry operator P&O. I am led to believe that employment law as we recognise it in the UK and Europe does not apply to US hospitality sectors where staff, such as front line hotel and restaurant waiters etc, are paid the absolute minimum which requires them to rely on tips to make a living. Consequently the huge increase in US room rates can only be regarded as profiteering in times of uncertainty.
Wait staff and tips is a different matter. I do know bartenders and waiters who make thousands in a night, so I'm not sure they would prefer a higher base wage and no tips.
#22
Join Date: Dec 2003
Location: NYC
Posts: 6,433
Employment laws and requirements are different in the US and Europe and have neither have changed much recently, so that's not likely to be an explanation for the recent rise in prices in both places. Hotels are in business to make profits and will set prices to whatever they think will maximize profits. This is true in any market environment. Costs are only one element in pricing.
#23
Moderator: Luxury Hotels and FlyerTalk Evangelist
Join Date: Sep 2002
Location: Palo Alto, California,USA
Posts: 17,854
Here's another example: I know that the Park Hyatt Paris is not so well regarded on this forum but I have always been treated well there. Am going to be there for a week starting May 30. When I booked during the pandemic, entry level rooms were E580/night (cheap for this hotel); when I checked today, they are E1,170 (definitely more expensive than any previous peak).
#24
Join Date: Aug 2016
Location: LA
Programs: Perennial Free Agent
Posts: 270
Here's another example: I know that the Park Hyatt Paris is not so well regarded on this forum but I have always been treated well there. Am going to be there for a week starting May 30. When I booked during the pandemic, entry level rooms were E580/night (cheap for this hotel); when I checked today, they are E1,170 (definitely more expensive than any previous peak).
#25
Join Date: Jul 2012
Posts: 1,115
As others mentioned already, the rates are this high because people are willing to book at these rates. Hotel chains are being given the opportunity to recoup their COVID-era losses on a silver platter, and they're grabbing it with both hands. Many of the COVID service and amenity cuts persist or have been made permanent, and people are *still* willing to book at much higher rates while getting much less in return, so profitability is going through the roof.
The good news is that the high prices are not likely to last. Because consumers willingly spend their money on high airfares, gas prices, car rental prices, hotel rates, etc., the U.S. median weekly checking account balance has been dwindling from its COVID high. It used to be +120% above February 2020 values in March 2021, but now it's already down to +60%. Soon the high rates will become unaffordable for a more critical segment of the population, and the rates will follow suit.
The good news is that the high prices are not likely to last. Because consumers willingly spend their money on high airfares, gas prices, car rental prices, hotel rates, etc., the U.S. median weekly checking account balance has been dwindling from its COVID high. It used to be +120% above February 2020 values in March 2021, but now it's already down to +60%. Soon the high rates will become unaffordable for a more critical segment of the population, and the rates will follow suit.
#26
Join Date: Apr 2011
Location: YYC
Programs: AC SE 1MM, Marriott Ambassador
Posts: 3,397
I went to the Maldives for 2 weeks with similar logic. Flying business class from YYC to Hawaii takes about 7 hours, about 24 hours to the Maldives (flying time, not counting layovers): the price for 2 was the same to both destinations. And that business class to Hawaii is usually a pretty bad hard product. And then hotels last fall were out of this world: the Westin on Maui (the Westin! not luxe by any stretch) wanted close to $1500 USD a night. A very nice room in the Maldives was the same rate. So we went to the Maldives. I honestly can't see returning to USA or Mexico for vacation until rates return to normal; the value proposition is just not there. Nor is Canada immune to this: $5000 CDN a night at Fogo Island Inn for a smallish room (650 sq ft.). They are smoking something over there...
#27
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Join Date: Feb 2022
Posts: 853
I went to the Maldives for 2 weeks with similar logic. Flying business class from YYC to Hawaii takes about 7 hours, about 24 hours to the Maldives (flying time, not counting layovers): the price for 2 was the same to both destinations. And that business class to Hawaii is usually a pretty bad hard product. And then hotels last fall were out of this world: the Westin on Maui (the Westin! not luxe by any stretch) wanted close to $1500 USD a night. A very nice room in the Maldives was the same rate. So we went to the Maldives. I honestly can't see returning to USA or Mexico for vacation until rates return to normal; the value proposition is just not there. Nor is Canada immune to this: $5000 CDN a night at Fogo Island Inn for a smallish room (650 sq ft.). They are smoking something over there...
The extra travel time to BKK was well worth it, the value in that country, particularly at the high end, combined with copious and friendly service (no labor shortages there!) have made me reconsider whether to bother with any other warm weather destinations.
#28
Join Date: May 2005
Location: Los Angeles
Programs: UA 1K, AA Plat Pro, Marriott Plat, Hilton Diamond
Posts: 1,048
It is even worse for those of us looking for quick weekends in the southern california area. Most of the hotels I would want to stay at are completely sold out for every weekend for the next few months and then a mid-week stay in a non-descript week costs the same as an jr suite at the Ritz Paris. Pool suites at the Amans in SE asia - even Amanpulo are often less. Sadly, the only thing stopping me is the wife has put the kibash on long-travel until our son is older.
The other issue that does not get discussed is the "hidden inflation." Meaning amenities that used to be included, but are no longer. For instance, at the St Regis Punta Mita, the evening champagne sabre and complimentary glass is no longer. Not the end of the world, but clearly not reflected in a "lower" room price. I find that the true luxury hotels have been better about this, but the "corporate chains" are real laggards.
Inflation, at least here in LA, has gotten so bad that when looking at menus at hotels in the Cote d'azur for our July trip, I actually think to myself that the FS Cap-ferrat is charging reasonable prices for food.
The other issue that does not get discussed is the "hidden inflation." Meaning amenities that used to be included, but are no longer. For instance, at the St Regis Punta Mita, the evening champagne sabre and complimentary glass is no longer. Not the end of the world, but clearly not reflected in a "lower" room price. I find that the true luxury hotels have been better about this, but the "corporate chains" are real laggards.
Inflation, at least here in LA, has gotten so bad that when looking at menus at hotels in the Cote d'azur for our July trip, I actually think to myself that the FS Cap-ferrat is charging reasonable prices for food.
#29
formerly known as deathscar
Join Date: Jul 2007
Location: Hong Kong
Programs: Virtuoso | Four Seasons Preferred Partner | Rosewood Elite | Hyatt Prive - and more
Posts: 2,096
I don't think it's general inflation so much as it is supply and demand. Like, many people are still apprehensive about booking anything international, but also people have money to burn on travel because they havent been able to do anything good for two years. More people are competing for the same thing.
At least in my circle, trips where people would have booked whatever blah room at the best western or ramada, and not given much care about how nice it is, are now booking high end places just to make a domestic weekend trip seem more special.
At least in my circle, trips where people would have booked whatever blah room at the best western or ramada, and not given much care about how nice it is, are now booking high end places just to make a domestic weekend trip seem more special.
Adding, I assume, paying premium rates to keep key and other staff around. Staffing has been an issue for many properties of late.
Just my two cents*/guess though....
* Which if you've gotten to the end of this post, is now worth six cents.
#30
Join Date: Jul 2012
Posts: 1,115
The other issue that does not get discussed is the "hidden inflation." Meaning amenities that used to be included, but are no longer. For instance, at the St Regis Punta Mita, the evening champagne sabre and complimentary glass is no longer. Not the end of the world, but clearly not reflected in a "lower" room price. I find that the true luxury hotels have been better about this, but the "corporate chains" are real laggards.
The chains knew that many of the "I'm going to vote with my wallet" statements would not materialize or extrapolate to the general public, and they were right.