'End of Cheap' Comes to Hotels, But Guests Not Flinching at Rates - CoStar

Excerpt from CoStar

Hotel rates, and the costs of travel in general, are higher. But so are the costs of operating hotels and providing travel experiences.

The theme of this year's Hotel Investment Conference, Central and Eastern Europe, better known as HOTCO, dubbed this "The End of Cheap."

At a panel on the topics of resorts, health and luxury, speakers said as costs go up on everything from financing to staffing a hotel, so do prices that are passed on to guests.

Hotel average daily rates have increased for many months, even with occupancies in some hotel markets around the world only now recovering to 2019 levels. Flight prices also have risen, even for low-cost airlines.

Takuya Aoyama, vice president of development for Central and Eastern Europe at Hyatt Hotels Corp., said it is more expensive for people to go on vacation to the Mediterranean than it was in 2019.

“For the vast majority [of hoteliers], revenue per available room is growing. In Central and Eastern Europe, occupancy is not fully back and a little lower than it is in the Mediterranean, which is not 100% back either,” he said.

Panelists said pricier vacations have resulted in guests looking at other destinations in Europe that not long ago might have been considered unfashionable.

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