U.S. Hotel Performance Split: Luxury Hotels Rise as Low-End Brands Slump


intercontinental dallas luxury hotels source ihg

Skift Take

Today's economic pressures are impacting consumers differently across income levels.

Luxury hotels in the U.S. have recently experienced robust growth in demand and room rates, while economy hotels have declined year-over-year. The numbers for the first five months of the year suggest a break with broad historical patterns.

"We're seeing a bifurcation by hotel class," said Jan Freitag, national director, hospitality analytics, at CoStar Group. "The higher-end traveler and, therefore, the higher-end hotels are showing robust growth in demand and room rate. But the same cannot be said for the lower end of the market."

Here are the year-over-year trends for the first five months of the year, according to CoStar:

Luxury hotel occupancy was up 1.8% Economy hotel occupancy was down 3.4%

This divergence breaks a long-standing pattern in the hotel