Why Do Hotel Rates Increase?

Hotel rates are something that every traveler has to consider before making a reservation. Often rates can fluctuate, and sometimes they can increase seemingly overnight. This can be frustrating for travelers who are budget-conscious, but there are legitimate reasons for this to happen. In this article, we’ll explore why hotel rates increase and what travelers can do to minimize their impact on their pocketbook.

Reasons for the Increase in Hotel Rates

There are several reasons why hotel rates can go up:

1. Seasonal Demands and High-Traffic Times

One of the most common reasons hotel rates increase is due to seasonal demands and high-traffic times. For instance, during long weekends, national holidays or major events like conferences, sporting events, and festivals, hotel rooms can be in high demand. Decent lodgings could be few, and the available rooms available that come with reasonable rates quickly sell out forcing hotels to increase their rates to meet increased demand.

2. Inflation and the Economy

Inflation and the economic performance of a specific geographic market can also impact hotel rates. When inflation increases, hotels must pay more for supplies and employee wages, which may lead to higher rates. Similarly, if a city or country is going through a recession, hotel demand may lessen while the total costs for running a hotel are still high, leading to less effective rates.

3. Property Renovations and Upgrades

At times, hotels may go through extensive renovations or upgrades to their property. This may help them keep up with the competition and stay relevant with the latest technology and trends or maintain guests’ comfort and satisfaction. These renovations can be expensive, so hotels increase their rates to compensate for this investment.

4. Increased Costs of Revenue Systems

Hotel room rates can also increase due to advancements in revenue management systems. Today, sophisticated booking engines, mobile apps, customer relationship management tools, and other software applications are available to help with pricing decision-making. The tools and software come with subscription rates, and hotels pass those costs onto their guests.

What Can You Do to Minimize the Impact?

While it is understandable to feel frustrated by sudden increases in hotel rates, there are a few things you can do to mitigate their impact on your budget:

1. Book in Advance

One way to avoid increased hotel rates is to book in advance. If you know you’re traveling during a high-demand period, booking as soon as possible ensures you secure an affordable rate. You can even set up alerts on travel booking sites that will notify you when a rate drops until your travel dates.

2. Comparison Shop

Comparison shopping can also help you find the best deals on hotel rooms. There are numerous travel sites like Expedia and Kayak that allow you to compare hotel rates from various providers. You can even contact the hotel directly to find out their best rate or see if they can match a rate found on another site.

3. Be Flexible

Being flexible with your travel dates can also work to your advantage. Check-in and check-out dates can have an impact on rates, so be open to adjusting your travel plans if significant savings are possible.

4. Join Rewards Programs

Many hotels offer rewards programs that can help you save money on future stays. Frequent stays or reservations through some sites like Booking.com can earn hotel loyalty points that can go towards free nights or reduced rate upgrades.

5. Negotiate Directly with the Hotel

Finally, consider negotiating directly with the hotel. They may offer you a better rate if you can guarantee multiple future stays. It is a strategy that works well for frequent corporate travelers.

Conclusion

Hotels rates can increase for many reasons. Seasonality, property renovations, costs of revenue systems, inflation, and the economy are just some examples. However, by booking in advance, comparison shopping, being flexible, joining hotel rewards programs, or even negotiating directly with the hotels, you can help minimize the impact of these rate increases on your budget. If you do face an unexpected rate increase, it’s essential to think back to the reasons we covered in this article and remain mindful of how they can affect your travel plans. Overall, the key factor is to be proactive about your travel plans to minimize their impact on your wallet.