KatW

Regarding covid, I think we are in for more. The hyper-infectious omicron variants are picking up steam and can reinfect multiple times. In myhome county of Santa Clara the positivity rate is close to 14% and rising quickly.

scented

I think offerendum is right... economically Europe is in a for a bumpy ride -- Germany for example has huge worries in terms of energy, more than other countries. Will be rather interesting to see the effects on various markets.

GUWonder

I am already coming across indications that the rising interest rates in parts of Europe are motivating people with some nicer homes to seek out getting some money by renting them out and/or renting them out more. The home rental availability has already led to some substitution away from suite bookings at some higher end hotels.

Pausanias

One UK supermarket is now putting electronic security tags on packets of cheese and butter, putting those products on equal footing with Rolex.

BESVISOR

Not hotels but travel related...

We just booked a trip to Maldives. When I was eyeing Qsuites a couple of months ago, it was ~$8,000 per ticket, last week, saw it at ~$5,000 per ticket and was super happy to purchase and "Saved" $6,000

uclabruin82

Yes, but I think the percent of people who care has gone down dramatically. My parents, who are in their late-60s have have not eaten inside a restaurant for 2 years are still going to Europe this fall...

GUWonder

Covid has dropped off tremendously as a factor considered in personal travel decisions — including with so many having had 3-4 doses of a Covid vaccine already. At some point soon, inflation and a declining wealth effect will mean demand for luxury travel will drop and drop a lot more widely. At that point, travel service providers will have two choices: discount to try to fill up, or to try to maintain high rates in hope that its financially better for the owner/operator to have very high rates at somewhat lower occupancy than much lower rates and higher occupancy. The trend among even non-luxury hotels before the pandemic was to back off discounting and to instead try to maintain high prices with lower occupancy levels.

xray

It's not just only the actual price - the experience isn't the same. You're paying a crazy amount for less than 5 star service due to lack of workers, covid closures etc. That's the part I find difficult to reconcile. Covid will start affecting people's decisions if testing to travel returns. It definitely affected my flexibility as testing positive means I can't work for 10 days and that would be much more expensive than any inflated hotel room.

KatW

I think this true of lower luxury tiers but not of the top rank, in my experience. During the pandemic, I’ve stayed twice at Las Ventanas in Cabo, at Chable Maroma, Las Alamandas.at Costalegre, Le Bristol in Paris, San Ysidro Ranch, The Lanesborough in London — all delivering great service at the level to which I am accustomed, ahem.

Zephyrous

I’m really glad that this thread even exists - I thought I was going crazy with the price hikes that I was seeing.

My own experience with hyper inflated prices was Paris over the Champions League weekend where already expensive hotel rooms went for insane amounts. I saw two star hotels at the 1000 Euro per night range. La Reserve was asking for 11000 Euros per night that weekend. I appreciate that it was a massive sporting event but there is a point where it simply looks super opportunistic- enough so to deter me from ever returning to the brand.

Equally the Rooster in Antiparos was coming in at triple the price it was last year.

The only surprise booking was Six Senses Maldives which came in at the same price that we had booked it a few years back.

I think the notion of luxury brands - including hotels - experiencing a massive boom, notwithstanding the fact that for years they had a stable consumer base, is slowly coming to an end. There was a lot of discretionary spending available following two years of lock downs, perhaps with people who wouldn’t necessarily afford certain things but given the savings they decided to spend. And indeed the global economy has learned to absorb shocks - be it war or fuel prices or any other event. But ultimately consumers do have for the most part limited resources and the aspirational consumers of the luxury market are about to priced out.

More importantly however even consumers who can afford it, may have a price ceiling. I personally find that things that I can certainly afford have become so expensive that I just am not interested in them anymore. By way of personal example: I no longer think that the price of Paris palace hotels is justifiable for me to book them for a weekend stay again. Perhaps they would be if I wanted to experience a Parisian grand dame or if I were staying for a week. But having stayed at a suite in cool 4* boutique in an area that I enjoyed more that cost less for a weekend than a night at an entry level room at GV or Crillon made me realise that there is nothing that they offer, in terms of the experience, that would justify the price hikes and the price difference.

And ultimately the question then becomes, are luxury hotels (and brands in general) alienating their established client base?

Satie

I couldn't agree more, especially the last sentence. And it's not because you can afford something, that you want to pay it.
But I'm a bit sceptical about prices going down in the near future. When China will open its borders at some point, there will be a new wave of costumers willing to pay crazy prices because they haven't been travelling abroad for the last 3 years...

neuman101

agreed, when you double the price for the same room, you have cut the value in half. Especially in a city, where you likely want to eat out, drink, etc - it just doesnt make sense at a certain price point. I can see safari camps, or beach hotel like Il san Pietro, etc having a bit more pricing power bc there arent easy substitutions, but in cities, its pretty easy to trade down.

Fc912

i wonder if people have observed increased F&B prices at resort hotels (or city hotels, but this is probably more prevalent at resorts given the captive audience)? I just came back from a hotel in Mexico and noticed that they inflated F&B prices significantly compared to our last visit in May 2021. Cheapest glass of wine was $45 after tip and tax and simple cocktails were $38. A bowl of guacamole was $40. I remember thinking the prices were high but not unusual for high end resorts when I visited last May but felt ripped off this time.

GUWonder

Prices tend to be stickier on the way down than on the way up. And hoteliers who have gotten used to getting the high prices with big margins on the revenue are going to be more hesitant to drop rates than to maintain or hike the high rates to try to keep up the margins. Whether it’s a surge in Chinese and Indian travelers or not, the motivation is already out there to keep those high prices even with some hit to occupancy levels and total revenue.

KatW

I am starting to see some fourth and fifth night free offers in Cabo (Esperanza and Las Ventanas) coupled with generous credits. Given the sheer numbers of luxe venues in the area, it’s not surprising that Cabo properties would lead in price relaxation. And, of course, this is low season.