This is something that's been in the back of my mind for more than a few years now a comment in a previous thread got me thinking about it. I think everyone in this hobby has noticed how hotel room prices seem to be out pacing inflation.
I have been watching for more than a decade now how hotel chains buy lesser chains out build new large facilities and just seem to expand out of control. My question is are the increasing rates a result of this expansion and is this just another finial bubble waiting to burst. In short are these corporations floating big loans and paying for them by higher room rates and cutting back in staff.
I have no background in this sort of finance but it's hard not to notice.
I think it has to do more with real estate prices than supply and demand. The demand for rooms in the Sacramento area was high after the fires in the foothills last year but that doesn't explain the rates going up state wide, it is outpacing inflation.
I and many financial experts think we are headed for a recession, existing housing sales have been declining for the past three months and new home sales are at a two year low...interest rates are going up.
Remember in 2008:
High gas prices
Stock market tumbles
Housing sales tumble
Sound familiar?
Last week I check the rate for Mammoth Lakes Motel 6.... 200 per night... WTF a Motel 6? Might just as well sleep in the car for one night...
This summer my Daughter and I made plans to go and look at colleges. One of the colleges she picked was in San Diego.
I thought for fun we would stay at the Hotel Del Cornado. We planned the trip out and picked Wed and Thursday nights for our stay.
I went to their website and nearly fell over at the average rate of $765/night.
We are staying at the Holiday Inn for $183.
Quote from: Fathernature69 on May 31, 2022, 09:27 PMThis summer my Daughter and I made plans to go and look at colleges. One of the colleges she picked was in San Diego.
I thought for fun we would stay at the Hotel Del Cornado. We planned the trip out and picked Wed and Thursday nights for our stay.
I went to their website and nearly fell over at the average rate of $765/night.
We are staying at the Holiday Inn for $183.
Book Room #3327! LOL
Quote from: Hobby on May 31, 2022, 09:41 PMBook Room #3327! LOL
The world's most infamous ghost.
No Thank you! To superstitious for me to stay in that room.
Have you stayed in 3327?
How about 237 at the Stanley Hotel?
Quote from: Fathernature69 on May 31, 2022, 09:27 PMThis summer my Daughter and I made plans to go and look at colleges. One of the colleges she picked was in San Diego.
I thought for fun we would stay at the Hotel Del Cornado. We planned the trip out and picked Wed and Thursday nights for our stay.
I went to their website and nearly fell over at the average rate of $765/night.
We are staying at the Holiday Inn for $183.
The Del is certainly a destination hotel, with rates to match.
Yep one of my regulars told me a few days ago that she has recently been paying about double [!] what she used to as little as a year ago [in the bay area]. And then guys wonder why provider rates have increased. We do indirectly pay for incalls and obviously for outcalls at hotels. They aren't free. If a hotel is $100 more than before most providers roll that cost into their overhead and you pay for it. Most are unwilling to stay at a crappier hotel to reduce cost. Staying at crappy hotels often results in lower quality clients or loss of some clients completely.
Why are they currently high? The more recent reason is people are traveling again and there is 2 years of pent up demand. Many conferences are in person again instead of virtual. So it's as simple as very high demand and little increase in supply. [Supposedly----I have to say the hotels I've been at recently are not at full occupancy yet but better than before when parking lots were empty and I was the only one there....LOL]
As for long term increases, I do not know all the reasons for that except in one case. A local Crowne was closed for about a year to remodel. When they opened they doubled their rate from $80 to $160 per night. I actually called them to ask why and get some other information. They told me that hotel was a franchise, privately owned by a family and not IHG [owner of Crowne]. Therefore they had to pay for the remodel and loss of income for a year. The easiest way to do that was to raise rates as long as volume was the same. Labor and benefits are often the biggest cost to run a business. Have those costs increased for hotels?
In my opinion, hotel rates haven't gone up that much.
Obviously, they go up if a large event comes to town, or over the weekend.
San Francisco or destination hotels can be ridiculous!
But, here in Sacramento, Fresno, and Reno. I can get a room at the Holiday Inn Rancho for $123 tonight and 179 at the Holiday Inn Golden 1 Center.
In Reno tonight the Holiday Inn is $159.
Close to $200 for a Holiday Inn? That sounds high to me.