U.S. Hotel Rates Rise 5% in First Half

Adapted by Dave Hogg from an article by Dan Peltier on Skift, September 2, 2014

The first half of each year includes several large-scale events for hotels, such as the Super Bowl, spring break, graduations and Memorial Day. This year, hotels also have rising economic confidence to thank for rates reaching near record highs.

The Hotels.com Hotel Pricing Index (HPI) for the first six months of 2014 found room prices are an average of $137 per night in the U.S., a 5% increase compared to the same period last year.

This is the second highest growth rate over the past decade for a half-year period, with the index hitting 118, one point lower than the highest half-year index ever recorded for the U.S. The global average is up 4%.

Though this is positive news for the hospitality industry, Taylor Cole, a spokesperson for Hotels.com North America, said “We’re trending towards pre-recession prices and travelers are getting more confident with the economy. New construction, availability of supplies and oil drilling can definitely have an impact on hotel prices.”

The U.S. hotel pipeline includes a bevy of luxury hotels, but Cole feels these properties still “allow room for mid-ranged priced hotels,” and likely aren’t a factor in the large increase.

Of the 50 most popular U.S. cities based on bookings on Hotels.com sites, Nashville, Tenn. had the largest increase year-over-year. With the average rate in the city soaring 20% to $164 a night, the 10.6 million passengers traveling through Nashville International Airport from January 1 to June 30 is a record high for the airport and a probable reason for the rate increase.

More than half of the 50 most popular cities had averages below $137, including Las Vegas, as an example.

“The $137 average could be due to guests upgrading rooms,” she said. “Prices are going up, but there are still some great deals to be had in larger markets, especially if you check the surrounding suburbs.”

Only Washington, D.C., Reno, NV and Salt Lake City experienced average price decreases, with rates down 1% in each city. Albuquerque, NM had the largest rank change increase compared to the first half of 2013, moving up three spots.

The HPI is a regular report on hotel prices paid in major destinations across the world. It is based on bookings made on Hotels.com sites and prices shown are those actually paid by customers per room per night, including taxes and fees, rather than advertised rates.

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