Hotel average rates in different areas of the globe are trending in opposite directions with some places like Australia/Oceania, Northern Europe and parts of Asia seeing year over year hotel rate declines upwards of 5%.
Southern Europe, North America and the Caribbean, southeastern Asia and Middle East are trending up in hotel rates over the past year. The Caribbean and Middle East being two regions where average hotel rates have gone up over 5%.
This post covers North America hotel rate trends and the next post will cover Europe hotel rate trends.
Year-to-Date Average Daily Rate for Hotels in the Americas regions
Source: STR Global
Loyalty Traveler note: There are two sets of data in STR Global.
Year-to-date changes give a better picture of the trends in hotel rates for the traveler in my opinion. This data shows how much hotel rates have changed from January 2013 through July 2013 compared to how much rates changed January 2012 through July 2012.
Looking at only the month of July 2013 compared to July 2012 to see rate changes is useful for travelers who travel in July, however, data for July 2013 hotel rates are lower hotel rates than average for some regions like the Caribbean and Australia where rates are higher in other months of the calendar year.
In the USA one of the busiest leisure travel months is July, so July 2013 data is useful for hotel rate trends for travelers planning July 2014 travel.
This post looks at the hotel data for Year-to-Date in 2013 to see the seven month trend, followed by July 2013 data to see the summer tourism trend which is peak travel season for the USA and Canada.
- North America $110.88 (+3.9% in rate for 2013; room occupancy up 1.5 % to 63.1%).
- Caribbean $195.30 (+5.8% in rate for 2013; room occupancy up 2.5% to 71.8%).
- Central America $116.75 (-1.4% in rate for 2013; room occupancy down 2.3 % to 60.9%).
- South America $138.81 (-1.4% in rate for 2013; room occupancy down –1.4% at 63.5%).
Trends I see:
Caribbean is expensive and rates are going higher. Occupancy is up in 2013. Bargains will be harder to find.
North America data covers US, Canada and Mexico. North America is the darling of hotel investors right now after most major hotel chains put their capital expansion into emerging markets of Brazil, Russia, India and China. Hotel real estate transactions are happening like it is 2006 again across the USA. As demand grows and supply does not increase, just changes brand name, expect rates to keep climbing in the hot spots of the USA.
Last week San Francisco had the highest jump in room rates for the country at $201.19 and 93.1% hotel room occupancy. That city is turning into the New York of the west. I have not paid for a hotel room in San Francisco all year. Every time I check it is overpriced for me.
Oahu, Anaheim, Miami, and Seattle round out the other hot spots in the USA for rising hotel rates for August travel last week. Washington D.C. and Philadelphia were the places where hotel rates dropped.
Central America is declining in occupancy and hotel rates. This could be the vacation destination to look at over the next year as hotels seeing declining revenue may offer some good incentives to attract customers. Panama City had a large decrease in occupancy last week dropping to 50%.
South America is seeing declining rates and room occupancy. This is bargain hunting territory. Buenos Aires, Argentina had a high occupancy spurt last week at 5.3%, yet occupancy was only 58.5%. Rio de Janeiro was at 70% room occupancy. Keep in mind that July is low season travel for much of South America when it is winter for much of the continent.
Americas –July 2013 Data
- North America $113.25 (+3.9% in year-to-year rate in July 2013; room occupancy up 1.7 % to 71.2%).
- Caribbean $171.08 (+3.9% in year-to-year rate in July 2013; room occupancy down 0.2% to 71.2%).
- Central America $107.75 (+1.0% in year-to-year rate in July 2013; room occupancy down 1.8 % to 59.3%).
- South America $128.23 (-1.3% in year-to-year rate in July 2013; room occupancy up only 0.1% at 65.8%.)
Trends I see:
North America has higher room rates in July 2013 than the average room rate year-to-date as would be expected. July is a major leisure travel month in the USA and Canada. Occupancy averaged 63.1% year-to-date and climbed to 71.2% for July 2013. North America is outperforming most of the world right now with rates up 3.9% for the year.
I was shocked to see Hampton Inn and Hilton Garden Inn, Holiday Inn Express and Marriott Courtyards with rates in the $150 to $200 range in so many places this summer where rates are half that during other times of the year.
Vancouver, Canada saw large gains in hotel occupancy this month with 85.1% of rooms booked last week. My parents canceled their plans to stay in Vancouver last week due to the high hotel rates and they scored a stay at the Navy base lodge on Whidbey Island as a base for touring the San Juan Islands instead of Canada.
Caribbean is filling fewer rooms in the hotel supply in July 2013 compared to 2012 shown by a declining occupancy rate. This could mean some good deals offered in the coming months, however, rising rates and lower occupancy can also mean better profit margins for hotels, so rates may just stay high and hoteliers let more rooms go empty.
Central America has seen a modest 1.0% rate year-to-year, but data indicates rates are dropping faster in 2013. Occupancy dropped in July 2013 to 59.3%, with fewer rooms filled than 2012. Central America probably is a good place to find bargains. This is probably a good time to be checking flash sale sites for Costa Rica and Belize vacations in winter 2014.
South America is seeing declining average rates and occupancy drop. 2014 is World Cup in Brazil which may mean the next six months are the best time to find a bargain in Brazil as new hotels open and tourists are not yet arriving in droves.
The Big Picture for Travelers
Hotel rates are localized and hotel data regional trends are the big picture that might not indicate the particular conditions of any specific hotel market. There are usually hot cities, states and countries and rising hotel rates in some places even when hotel rates are dropping across a global region.
The average hotel room rate in North America is $110, but that data point is irrelevant when looking to book a hotel in New York City or San Francisco.
Keep in mind that specific locations within a region, country or state can have highly variable hotel rates. A regional trend is a very big picture view.
Places where hotel rates are dropping also means the price of other goods may be dropping for the travel destination. Package tours, restaurants and activities may offer deals in an environment where the travel economy is showing weakness.
Next up in Where to Travel is a review of hotel rates across Europe.
Data Source: Hotel News Now – Americas Results for July 2013 (August 22, 2013)
Ric Garrido, writer and owner of Loyalty Traveler, shares news and views on hotels, hotel loyalty programs and vacation destinations for frequent guests.