In cities across the globe, the price for a typical hotel room has skyrocketed, with many rooms now commanding four-digit nightly rates, according to new research from Travel Weekly. Real estate analytics firm CoStar Group found that by mid-2024, 460 properties around the world had an average daily rate exceeding $1,000. That’s a significant jump compared to just five years ago when only about 150 hotels hit that price point. It’s safe to say that the high-end hotel market is thriving, even as the lower end of the spectrum isn’t seeing the same success.
The rise in luxury hotel rates is fueled by several factors, according to Jan Freitag, CoStar’s national director of hospitality analytics. Demand for more suites and connecting rooms is driving prices up, as is the lingering effect of pent-up travel demand from the post-Covid era. People are clearly eager to make up for lost travel time, and they’re willing to pay a premium for it. However, the surge in luxury pricing also highlights a widening gap in the market—while the upper end flourishes, the more budget-friendly options are struggling to keep up.
Countries like Italy, France, and the United States are leading the pack when it comes to these inflated hotel rates. In the U.S., for instance, the number of properties with average rates above $1,000 a night shot up from 22 in 2019 to around 80 by mid-2024. Italy saw a similar explosion, jumping from fewer than 20 properties to nearly 70, while France experienced a rise from 20 to nearly 50. Clearly, the demand for luxury accommodations is booming, especially in these prime travel destinations.
What’s more, these numbers may actually be underreported. Smaller, ultra-luxury hotels—such as those offering African safari experiences or exclusive European bed-and-breakfasts—often don’t share their financials, meaning the true number of hotels hitting these price points could be even higher. And while cities like Paris, New York, and London have always been known for their premium rates, this trend is now spreading to other markets, pushing luxury pricing into new territories.
Despite the eye-popping rates, not all travelers are ready to splurge. A Bloomberg survey from last April revealed that nearly 70 percent of respondents wouldn’t spend more than $500 per night on a hotel room. Only 24 percent said they’d be willing to shell out $1,000 per night, which suggests that the pool of high-end travelers may be shrinking. Unless, of course, they’re ready to stretch their budgets even further to keep up with the rising costs of luxury travel.
