Skift Take
Excellent news for travelers, bad news for hotel owners. The U.S. hotel industry is seeing a (modest) decline in room rates after a current remarkable run-up in costs.
Sean O’Neill
Rising hotel space rates in the U.S. have stopped adding to wider inflation. Hotel prices decreased in December by 0.5% year-over-year.
According to U.S. inflation information released on Thursday, hotel rates rose 0.4% month-over-month in December.
The cooling in hotel prices contrasts with broader inflation that hasn’t been tamed yet. In general, U.S. consumer rate inflation was up 3.4% year-over-year in December.
Recent hotel pricing has actually recommended that the post-pandemic boom in travel need– which produced double-digit rate spikes a year ago– has actually been sputtering out. Reasons consist of a small amounts in demand for rooms. It is prematurely to inform if hotels saw labor cost pressures ease in some markets.
Hotel rates as a national average dropped 3% in between September and October and by 1% between October and November. (The U.S. Bureau of Labor Stats changed the numbers to minimize the impact of seasonal patterns such as weather condition, holidays, and school schedules.)
Other information sources see a slightly different photo.
Initial numbers for December show U.S. hotel rates up 2.2% year-over-year, according to STR, the gold standard for hotel efficiency benchmarking. The rate has actually been cooling because November when rates were up 3.6% year-over-year.
“It talks to a step-down in the growth rate but that there’s still development,” stated Jan Freitag, nationwide director of hospitality analytics at CoStar Group. “From a longer perspective of comparing late last year with pre-pandemic, and looking in inflation-adjusted terms, rates are approximately flat in genuine dollars.”