Luxury Lodging Outshines Budget Brands as Hotel Prices Soar

As hotel prices in the U.S. continue to rise, reaching an average daily rate of 8.45 in May 2024, a new study reveals a surprising trend: Customers are finding the best value for their money not in no-frills accommodations, but in luxury brands that excel in service and amenities.

Elevating Expectations: The Changing Landscape of Hotel Guest Satisfaction

Luxury Brands Shine, Budget Chains Struggle

The 2024 North America Hotel Guest Satisfaction Index Study from J.D. Power surveyed 39,468 hotel guests and found that overall guest satisfaction has declined significantly for hotel brands in the "limited-service" upper midscale, midscale, and economy categories, such as Extended Stay America, Ramada by Wyndham, and OYO. In contrast, hotels in the luxury and "upper upscale" categories, including the Ritz-Carlton and Waldorf Astoria, have seen steady or increased guest satisfaction, despite some of the sharpest increases in average room rates.This trend suggests that as hotel prices rise, customers are placing greater emphasis on the quality of service, amenities, and overall experience, rather than simply seeking the lowest price. Operators of cheaper hotels would do well to focus on improving guest rooms, property maintenance, and renovations to enhance guests' perceptions of value.

Fewer Trips, Longer Stays: The Changing Dynamics of Hotel Demand

The study also found that U.S. travelers are taking fewer trips but staying longer when they do travel. On average, North American hotel guests are taking nine trips per year, down from 10 in 2023, and are staying an average of 3.43 days, up from 3.36 in 2023. This shift in travel patterns is putting a greater focus on the hotel experience, as guests expect more from their accommodations during their longer stays."Hotel guests are staying longer on their trips, and this puts a real focus on the hotel property for everything from room cleanliness and facilities maintenance to interactions with front desk personnel," said Andrea Stokes, hospitality practice lead at J.D. Power. "Ultimately, traveler expectations have increased along with hotel room rates, and when hotels do not meet or exceed those expectations, the perception of value for money declines."

Maximizing Value: Identifying the Best Hotels for Every Budget

To ensure a satisfactory hotel stay, it's crucial for travelers to do their research before booking. The 2024 North America Hotel Guest Satisfaction Index Study provides a helpful guide, highlighting the hotel brands that rank highest in guest satisfaction within their respective segments:Luxury: The Luxury Collection (772)Upper Upscale: Margaritaville Hotels & Resorts (726)Upscale: element (707)Upscale Extended Stay: Hyatt House (696)Upper Midscale: Drury Hotels (744)Upper Midscale/Midscale Extended Stay: Home2 Suites by Hilton (695)Midscale: Tru by Hilton (688)Economy: Microtel by Wyndham (618)Economy Extended Stay: WoodSpring Suites (603)By considering these top-performing brands and aligning their expectations with the current hotel landscape, travelers can maximize their value and enjoy a more satisfying hotel experience, even as prices continue to rise.