BUSINESS

Hotel rates reach new record; more guest fees to come

At $263 a night, New York had the highest average hotel rate in 2014

If hotel rates seemed a bit more expensive last year, it wasn’t your imagination.

The average U.S. hotel rate in 2014 was the highest ever — up 4.6% to $115 per night — and industry experts are predicting a 5.2% increase by the end of this year.

On top of higher rates, you can also expect hotels to add more guest charges, such as early check-in fees.

A new report by STR Inc., a hospitality research firm, also shows that the average revenue collected by hotels per available room rose by 8.3% to a record $74, and occupancy jumped 3.6% to 64.4%.

The highest room rates in 2014 were in New York, where hotel guests paid an average of $263 a night, according to STR. The second-highest average rate was on Oahu Island in Hawaii ($221 a night), followed by San Francisco ($207) and Miami ($185).

The average hotel rate in Los Angeles last year was $147, about $10 higher than the average for 2013, according to STR. That’s a boost of about 7%, which outpaced the national increase.

Despite the record-high room rates, hotels are not likely to give guests a break on extra fees and surcharges, said Bjorn Hanson, dean of New York University's Preston Robert Tisch Center for Hospitality, Tourism and Sports Management.

With demand rising and occupancy rates at the highest levels in decades, Hanson said hotels are under no pressure to cut guest fees.

“Hotels have pricing power now and they will exercise that,” he said.

In fact, Hanson said, hotels are even creating new fees. For example, some hotels now charge to guarantee guests that they will get a specific type of room — such as a room with a view or a room with a king-size bed.

Another reason hotels are not eliminating fees and surcharges, he said, is that hotels pay taxes to local municipalities based on room rates. They don’t pay such taxes on guest fees.

To read more about travel, tourism and the airline industry, follow me on Twitter at @hugomartin.

Copyright © 2016, Los Angeles Times
77°