A $1,000 nightly rate is the new norm at luxury hotels.
In cities across the world, the average hotel room comes with a hefty four-digit price tag or more, according to new research published by Travel Weekly. The data, compiled by real estate analytics firm CoStar Group, found that 460 global properties clocked average daily rates of more than $1,000 by the first half of 2024. By comparison, in the same time period just five years ago, there were only about 150 hotels with four-figure room rates.
“In general, this means that the upper end of the market is still doing quite well, but the lower end of the market is not,” Jan Freitag, the national director of hospitality analytics for CoStar, explained to the publication. Freitag also told WSJ that the demand for more suites and connecting rooms factors into the price hikes, as well as the lingering need to travel post-Covid lockdowns.
More specifically, Italy, France, and the U.S. have seen the biggest rise in room rates in the first half of this year. Here in America, roughly 80 properties clocked an average daily rate of $1,000 or more by the first half of this year, compared to just 22 back in 2019. Over in Italy, that figure skyrocketed from less than 20 to almost 70 and in France, the number of high-end places shot up from 20 to nearly 50.
The firm noted that the totals are likely even loftier than what was reported, since smaller, ultra-luxe hotels—think African safari lodges or European bed-and-breakfasts—don’t always offer up their monthly and weekly revenues to the report.
“It’s always been expected that if you were in Paris or New York or London, you were going to pay a premium, but now you’re seeing it elsewhere,” Peter Ricci, director of Florida Atlantic University’s hospitality and tourism management program, told Travel Weekly. “It depends on the market and time of year, but there is absolutely a small percentage of overall travelers that is able to hit that price point.”
Last April, 69 percent of respondents in Bloomberg’s MLIV Pulse survey said they wouldn’t spend more than $500 a night on accommodations. At the same time, only 24 percent of the people who were polled set their limit at $1,000 per night, meaning the number of high-earning travelers splashing out on extravagant vacations might be shrinking. Unless, of course, they’re willing to up their budget.
