«Budget hotels empty, luxury sold out: the price surge reshaping travel»
Rising Hotel Prices: Bookings for Lower-Priced Categories Plummet, While Luxury Hotels Remain Sold Out.
The hotel industry is undergoing a period of significant transformation. According to the latest data collected by major trade associations, the across-the-board increase in lodging costs is leading to a sharp decline in reservations, but with an increasingly evident divide between luxury properties and budget or mid-range accommodations.
While 5-star hotels and exclusive resorts are fully booked for months—sometimes even with waiting lists—1-, 2-, and 3-star properties are finding it increasingly difficult to attract guests. This trend has been observed in major art cities as well as in seaside and mountain resort destinations.
There are many reasons for this. On the one hand, inflation and rising energy costs have prompted many hoteliers to raise rates, even for lower-category properties. On the other hand, travelers on a tight budget have begun to drastically cut back on lodging expenses, opting for alternatives such as short-term rentals, hostels, or even canceling their trips altogether.
“In the past, a family could afford a week at a three-star hotel,” explains a spokesperson for Federalberghi, “but today, with the same budget, they can barely cover three nights. As a result, many prefer to forgo the trip or seek non-traditional solutions.”
In contrast, guests at luxury properties seem immune to price increases. For these travelers, price is not a deciding factor: they seek exclusive experiences, personalized services, and high quality. And they are willing to pay any price to get them.
The risk, experts warn, is that an unsustainable polarization of the market will occur, with lower- and mid-range hotels forced to close or repurpose their facilities, further reducing the supply of affordable tourism options.
