Hotel promotions are rare this summer: TPG’s tips for finding them
In case you haven’t heard, summer is shaping up to be expensive for many travelers to the United States.
A mix of inflation, ongoing restrictions on international travel in some parts of the world, and geopolitical tensions in Eastern Europe will keep domestic hotel costs high this summer in many U.S. markets.
That’s not much of a relief to travelers who were already paying sky-high fares the past two summers, when domestic travel was often the only option.
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“It will be more or less the same. What we saw in 2020 was the Great American Road Trip, and it kind of started again in 2021,” said Jan Freitag, national director of hotel market analysis at CoStar.
“I don’t think we expected anything out of the ordinary in terms of summer travel that we haven’t seen in 2020, which means sustained demand for beach destinations, car and resort hotels.”
The difference this summer is that traveler confidence is likely to hit a new high compared to the past two years. Indoor mask mandates are being dropped, and a combination of vaccines and therapeutic treatments has led many state and city leaders to view the pandemic as entering an endemic phase — meaning the disease hasn’t gone but has mostly regional flu-like epidemics.
In the next six months, 73% of Americans plan to travel, up from 62% just a year ago, according to MMGY Travel Intelligence.
But room rates are already exorbitant at many leisure and drive-in destinations in the United States without taking into account the expected increase in demand.
The most requested destinations
The Florida Keys, at just over 90%, has the highest average occupancy rate in the nation and the second highest average daily rates, at $599.33, according to data from STR. The highest daily rates belong to the Hawaiian island of Maui, which commands average rates of $605.77 per night.
Florida and Hawaii currently dominate nine of the top 10 STR rankings for the highest room rates in the United States. But the broader “Colorado region,” which includes national parks and ski resort markets such as Vail and Aspen, comes in eighth at $279.08.
Various Florida markets account for the top nine spots in terms of occupancy, but Phoenix came in at 10th place with an average occupancy rate of nearly 82.3%.
“Resort hotels… are full and charge what they want. The consumer coming out of this downturn is not price sensitive. This is a very unusual recovery and people can charge whatever they want,” Barry Sternlicht, former CEO of Starwood Hotels & Resorts and founder and CEO of investment group Starwood Capital, told CNBC in early April. “Luxury goods, whether it’s wine or exclusive travel…There’s definitely pent-up demand, and I’m actually amazed at the pace and rates that hotels are able to charge in this moment.”
Avoid crowds and high prices
For people looking for pre-summer deals, one of the most surprising deals at the moment, according to STR data, includes the “Tennessee region” that stretches from Memphis in the western part of the United States. ‘state in Knoxville and points farther east in Appalachia.
Rates averaged $89.16 per night, but that’s likely more related to the number being statewide. So consider visiting Dollywood in Pigeon Forge or Graceland in Memphis as a lower-cost alternative to the extraordinarily popular Nashville.
Avoiding some of the usual high-demand destinations of the past two summers is probably key to not taking a massive dent in your wallet.
The city of Kailua-Kona on the Big Island of Hawaii currently leads April in demand, based on forward-looking occupancy data from travel technology provider Amadeus. The city already has an occupancy rate of 76.1% through the end of the month and average room rates of $692.22.
And that’s not even where you’ll find the highest rates for the end of the month.
That honor goes to Kahului, on the island of Maui, where fares average $767.35. Other popular destinations include Palm Springs, California; New Orleans; and San Diego – although this trio is a bargain compared to Hawaiian destinations.
Room rates in Palm Springs are averaging nearly $354 per night through the end of the month, while the Big Easy is $233.78 and San Diego rates are averaging $233.47 $. The lowest room rates in the most popular destinations are found in Orlando, where Amadeus has average room rates of $193.79.
But an Amadeus spokesperson notes that a lot can still change on a lark. As the travel recovery continues, the shorter booking windows made common in the first summer of the pandemic have not completely disappeared.
“Short booking times have been one of the most impactful trends of the past two years, with the majority of hotel bookings being made only 0-7 days in advance during the pandemic,” said Amadeus spokesperson via email. “However, this indicator continues to improve, providing a significant opportunity for increased occupancy throughout April and into the summer travel season.”
At the end of the line
Things can change quickly in such a demand travel environment this summer, so sticking to smaller cities such as Memphis and even towns in the Great Smoky Mountains might be your best bet for getting a deal on places like Nashville. and South Florida, whether you book well in advance or at the last possible minute.