US hotel prices to remain low for another four years
There's good news for folks checking in to swankalicious hotels over the next four years; considerably less for the hotels themselves. A Bloomberg report states that US hotel rates are unlikely to reach their 2008 levels until 2012 at the very earliest. One analyst has described the actions of the industry as "near-panic rate cutting". Hurrah!
The recession obviously means millions of hotels are losing billions in both tourist and conference trade. On top of losing revenue from both traditional streams, there are the cashflows pressures felt by every industry, such as increasing rents and suppliers scrapping their 90 days notice on payment and demanding monies on 30 day terms.
Hotel chains like the InterContinental Hotels Group, which has a portfolio mixing five star hotels with the mid-price Holiday Inns, last month reported that first quarter net income had dropped by nearly 60 per cent on lower room rates. Rates have dropped 19 per cent year-on-year across luxury hotels, while New York rates fell the most in the US, sliding by nearly a third.
Las Vegas provides a microcosm of how the industry is struggling right now; over 15,000 new hotel rooms will soon open on the Strip, requiring an extra $3.2 billion of annual tourist income just to break even. The hotel developers are already in billions of dollars of debt - two high profile hotel projects have gone bust this year - while the traditional hotels on the Strip are slashing rates to stupidly low levels; you can book a mid-week room in the Downtown classic The Golden Nugget for just £32, and a night on the Strip in the MGM Grand for just £42.
So while the media yawns on about staycations, if you can find a red hot flight deal from the likes of HotUKDeals then hotels around the world are yours for the taking right now.