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A hotel room high in the sky with a price to match too!
As if the weak dollar to euro/dollar to pound exchange rate wasn't enough to deter you from booking that trip to Europe, a recent surge in hotel prices provides yet another reason to plan a staycation this year.
According to a report in the U.K.'s The Independent, European hotel rates are reaching ridiculous highs, jumping "19 percent since last month," with popular destinations seeing the biggest increases of all. Per a survey by Trivago:
And now we interrupt your regularly scheduled programming to bring you some hotel industry news...
After years of rate increases and booming profits, will 2008 be the year that the hotel business takes a breather? According to this forecast from PKF Hospitality Research in Hotel & Motel Management:
Across the board, all segments of the lodging industry are forecast to experience flat or declining occupancy levels in 2008."
Maybe hotels will offer us hotel guests a price break in 2008?
We've commented before on the outrageous hotel prices in New York City and noted that this market saw the biggest increase in rates over the past year. That kind of revenue opportunity makes real estate developers salivate, so Thompson Hotels and others have been on a building spree this year.
The hotel industry is known for getting caught up in booms and busts though, so this New York Sun article strikes a cautionary tone: Amid Boom, a Fear of Glut in Hotels.
There's nothing close to a glut right now, of course. "Many hotels in Manhattan will exceed 90% occupancy for the year, and some are likely to exceed 95% occupancy." But when 20, 30, or 40 new hotels open up in one year--and maybe the economy takes a breather--then what? "There will be a lot of pain," a principal at BD Hotels, Richard Born, said. "Budget hotels being developed for $400,000 per key and luxury hotels being developed for $1 million-plus per key will not survive." (Yes, you read that right, developing a hotel in Manhattan can cost a million bucks per room.)
Bad news for hoteliers could mean some rate relief for us commoners who are avoiding the city until prices return to sanity. Keep building please!
[Photo: Standard NYC Hotel, Opening in '08]
If it feels to you like hotel prices have really gone up a lot this past year, you have probably spent some time in New York City, Washington D.C., or Boston. Those are the three markets with the greatest year-over-year uptick in rates since last October, according to the number crunchers at Smith Travel Research.
Prices in New York have gone up 15.4 percent, to a choke-inducing average room rate of $320.87. Rates in D.C. have risen 12.8 percent (average $171.20) and in Boston they have also risen 12.8 percent (average $182.18). We guess when the Watergate--pictured here--reopens, we shouldn't call up looking for a bargain.
The rest of the top-10 is interesting as it's literally all over the map, showing the nation's economy is booming in different places and local supply tightness can have a big influence. Here are the percentage increases, but these markets are far more reasonable then the top three. Average room rates only vary from $96.93 in Nashville to $139.30 in Miami.
Looks like we will be doing a lot of more vacationing down South this year, huh?
· Smith Travel Research [Official Site]