When Mark Lomanno planned a weekend jaunt to Manhattan last month, the Tennessee-based hotel analyst figured the last thing he’d need to worry about was finding a place to stay.
He figured wrong. After several days of searching, Lomanno and his family wound up paying “a lot more than we wanted to” for a suite. Most of the city’s hotel rooms had been booked weeks earlier.
New York isn’t the only major city to post a flurry of “no vacancy” signs this fall. Hotels in Chicago, Boston and, to a lesser extent, Atlanta, Las Vegas, New Orleans and San Francisco are reporting near-record occupancy levels. Many dates are sold out through the Christmas shopping season.
The upshot for guests: fewer discounts, the need to plan a month or two ahead during peak travel periods and more stringent reservation policies at hotels, including, in some cases, a charge of up to $50 for early departures.
Hoteliers credit the boom to a post-Labor Day rash of airline fare sales, expansion by such low-cost carriers as Southwest and ValuJet, strong convention business and a boost in the number of international visitors to the United States. It’s a sharp departure from the late 1980s, when a building binge by hotel companies and cost-cutting by corporate travelers combined to leave many rooms empty.
“The equation has finally shifted: More people are demanding rooms than new rooms are being built,” says Lomanno, executive director of Smith Travel Research.
According to a recent industry forecast by PKF Consulting, hoteliers will fill an average of 70.2 percent of their rooms by year-end. It would be the first time since 1979 that occupancy rates have climbed above 70 percent.
At the same time, the average room rate will reach $65.49 in 1995–a 4.2 percent increase over last year, and the first time since 1986 that room rates have increased faster than the inflation rate. Forecast for next year: another 4 percent jump in prices.
Emboldened by that shift in demand, Hyatt and Westin say they’ll start charging guests a fee if their stay is shorter than originally scheduled and they don’t inform the hotel of their change in plans when they check in. Many bed-and-breakfast inns and small hotels require full payment in advance, but an “early departure” penalty is unusual for business-oriented hotels.
By the end of the year, Hyatt will charge guests who leave early $25 per stay at all 103 of its U.S., Canadian and Caribbean hotels (the Grand Hyatt in Washington, D.C., charges $50 per stay). Westin, meanwhile, plans to charge $50 for early checkouts starting Jan. 1. The fee will apply at Westin’s 40 company-managed properties in the United States and Canada, and may be extended to Mexico later.
Hyatt and Westin say the new fees will help them control inventory. Because most travelers book several days in advance, empty rooms are tough to fill at the last minute. But other major chains haven’t matched the charges, and industry analysts say a backlash from disgruntled guests may make the policies short-lived.
Indeed, Hyatt’s Carrie Reckert says each hotel will “work with travelers on a case-by-case basis … we don’t want to be unreasonable.”
Westin says it may skip the early-checkout charge for “extenuating circumstances,” such as family emergencies.
Just as competitive pressures may prevent early checkout fees from spreading, the industry’s rebound hasn’t eliminated good deals entirely. While half-price specials with free meals thrown in have become “few and far between,” says Lomanno, travelers can still find sizable discounts. But they’ll need to be more flexible, says Robert Diener of Hotel Reservations Network, a Dallas-based hotel consolidator.
For example, some Las Vegas hotels are sold out on weekends six months in advance, but midweek gamblers will find more availability and cheaper rates.
There may be fewer rooms at the inn and higher prices for what rooms are available, but to get a room–and a deal–now requires a little more planning.
