Q – Will the hotel rates we are seeing, many over $2000 per night at five-star properties, stay steady in 2024?
A – No – nothing in this current environment will be steady. Hotels will be charging as much as they can given the losses still being felt during the pandemic. The new Aman Hotel in Venice, for example, has starting prices that are approaching $3000 per night. Hotel rates, much like cruise pricing, are not normally controlled by humans. There are algorithms that control pricing increases once a certain occupancy rate is achieved. Price increases are slow and steady and the one rule of thumb is that the first 25% of guests to book a property tend to get the best rate. Occupancy in Europe is now running 37% ahead of its peak in 2019 in terms of American visitors. But that is also true of Indian visitors, visitors from all over Europe and the South Pacific. Records are being broken and that is slowing down getting firm rates for better properties in 2024 and 2025. Many of the hotels we work with along the Amalfi Coast, for instance, are delaying price quotes because truth be told, they just don’t know how much they can charge and operate at 100%.
Given current demand, no one is predicting a rapid decrease in room pricing. The industry still has to compensate for two years of closed properties and staff depletion.
