Photo courtesy of Hotels.com
Hotels.com released its latest Hotel Price Index (HPI) on Tuesday, and things appear to be looking up for the hospitality industry once again.
The HPI revealed that hotel rates increased by 3 percent worldwide in 2014, compared to 2013, making it the fifth straight year hotel prices had increased year-over-year.
That included a 5 percent increase in North America and a 4 percent jump in both the Caribbean and Europe & Middle East regions.
But look beyond the vast mountains of data about room prices, and a picture begins to emerge revealing some interesting trends in the industry.
Taylor Cole, APR, director of PR and social media for Hotels.com North America, said the growth could be attributed to many factors, including people generally becoming more mobile, more information becoming available about travel, more options in pricing and more travel deals, fuel prices declining, the travel-happy millennial generation adding to tourism numbers, relatively affordable airline ticket prices and an increase in overall supply. Cole said over the past three years, there's particularly been an increase in luxury and boutique hotels, led by destinations such as Las Vegas, Canada and Dallas.
North America equaled its highest growth rate ever at 5 percent. Of the top 50 most popular destinations in the United States (domestic and international travelers), all recorded price increases, with the exception of Lake Buena Vista (down 1 percent) and Reno (down 1 percent). Although, Cole noted that just one or two hotels changing their prices in Lake Buena Vista-home of Walt Disney World-could change things in the city.
New York City, despite being the most expensive U.S. destination at an average of $270 per night, is still the most popular U.S. destination. Rounding out the most expensive of the top 50 most popular U.S. destinations in 2014 were Honolulu, San Francisco, Boston and Miami. The most popular cities were New York City, Las Vegas, Orlando, Los Angeles and Miami. New York City and Las Vegas, Cole noted, were unique in that they were heavy favorites among both domestic and international travelers.
The cities with the biggest jumps in price, year-over-year, were Nashville (up 15 percent), Seattle (up 12 percent), Denver (up 11 percent), Scottsdale and Portland (both up 10 percent).
In fact, the state of Tennessee as a whole raised prices significantly.
"In terms of being most expensive, I'd like to call out the whole state of Tennessee," Cole said. "Tennessee had one of the biggest increases, specifically Nashville. Overall, we can see tourism is booming, and based on demand, (hotels) are commanding higher prices."
The Northeast region (New York, Massachusetts, Washington D.C. and Rhode Island) has also spiked prices in accordance with demand.
As far as international destinations, London and Mexico continue to be hotspots for American travelers. London continues to be the most popular American destination, despite increasing hotel rates by 10 percent to $268 per night in 2014 (the second most expensive top 50 international destination). Punta Cana was the most expensive international destination, hiking rates 8 percent to $292 per night. It's also one of the top 40 most popular international destinations for Americans. Los Cabos was also the third-most expensive international destination among the top 50, while Cancun/Riviera Maya ranked sixth in popularity.
Who is coming to America these days?
Well, you probably guessed Chinese travelers would be in the mix. Among the most important demographics in the travel industry today, Chinese travelers are so valued right now that Hotels.com actually created an entire annual index, released every year (the Chinese International Travel Monitor, or CITM).
Cole said more and more hotels are employing Mandarin-speaking front desk agents these days, as well as offering Chinese and international-style breakfast and meal services.
Chinese travelers are also showing a tendency to book smaller boutique hotels (ahem, Mandarin Oriental), which bodes well for destinations like Las Vegas (ahem, Mandarin Oriental, Las Vegas) that are starting to offer more boutique offerings.
According to the HPI, Las Vegas, New York City, Los Angeles and Miami were hot destinations for Chinese travelers in 2014.
Hotels.com has also been able to unveil some travel trends as a result of the HPI. Food tourism is still huge. For Spring Break, Cole recommends both Kentucky (many travelers are seeking out the famous Bourbon Trail and quaint Bardstown) and New Orleans (a destination ripe with great food and interesting culture) for those "looking to do something a bit different."
Marijuana tourism, particularly in Colorado (the first state to legalize marijuana), has also been significant. Hotels.com, which will actually monitor tourism daily for destinations in the national news, said that tourism in Denver has spiked a whopping 73 percent since April 20, 2014.
Of course, technology continues to drive the travel industry. Hotels.com, for example, engages in personalized digital marketing. Its official mobile app also automatically provides deals for hotels near the traveler's specific location (one in three bookings is made within 72 hours on a mobile device, Cole said). Hotels.com's loyalty program, Welcome Rewards, is also offering one night free to travelers for every 10 nights booked through the website.
And, of course, millennials are helping drive the development and supply of travel technology.
"They're definitely connected online and are purchasing travel online," Cole said.
Overall, the travel industry is flourishing, and Cole doesn't see that coming to a halt anytime soon.
"Travel continues to be a booming industry," Cole said. "When our HPI was at its lowest, that was during the recession, but most of the hotel prices have steadily increased over the years. We haven't seen that downturn since back in 2007."
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