INTERNATIONAL REPORT — As consumers face higher costs, data
from London-based Lighthouse (formerly OTA Insight) shows that many consumers,
especially in Western economies, are becoming more budget-conscious and opting
for value-driven destinations and shorter stays.
The “State of global hotel pricing” study for the first half
of 2024 also finds that while the global appetite for travel remains strong, it
does appear that some post-pandemic momentum has run out of steam. Many
travelers have seen their savings depleted and are feeling the pinch of
inflation, which has reduced the ability of many hotels to raise prices. Click here for a copy of the report.
As hotel companies have discussed a bifurcation of spending
for low-income and high-income consumers, the global patterns for hotel costs
also show divergent trends.
Lighthouse said a cooling market is evident in North
America, as hotel room rates fell marginally -0.2% in the first half of 2024. If
the numbers are adjusted for inflation, that becomes roughly a -2% decline.
Advertised rates for the second half of 2024 show a nominal 2% increase but are
effectively flat in real terms.
Europe was once the pricing growth leader, but in the first
half, it only saw a 3% year-over-year increase compared to 2023, while in the
second half advertised rates are down 2% against 2023.
Hotel rates in Africa, the Middle East and Oceania are
experiencing downward price pressure in the first half of 2024, a trend
continuing into the second half.
Lighthouse said the two regions that are charting a
different course are Latin America (including the Caribbean) and Asia Pacific.
Building on a solid 2023 performance, Latin America leads
all regions in rate performance for 2024, with averages soaring to
$269 per night in the first half (up from $233 in the first half of 2023). This
represents a 22% increase from 2022. Advertised rates for the second half of
2024 are also up 19% YOY.
Asia’s advertised rates for the second half of 2024 are up
15% to the same period in 2023. Lighthouse said the last three years were
marked by consumer hesitancy and poor pricing performance in key markets like
China, Japan, and Thailand.
Top-performing markets for the second half
Looking ahead, Lighthouse said traditional beach
destinations are back in favor for the second half of 2024, while emerging
markets like India continue to gain ground.
Hotspots for exceptional room rate growth include the
Central Mediterranean, Mexico, Colombia and Southern Thailand beach destinations.
India has six destinations in the top 20 for rate growth in 2024.
Saudi Arabia is also hot with Riyadh becoming the second
fastest-growing destination for room rates in the first half of 2024 (a 31% YOY
increase).
Potential problems in APAC
Despite APAC’s overall pricing strengths, the report also
notes a troubling fact: Asian markets are overrepresented among the
worst-performing destinations in 2024. Those low-performing destinations are
concentrated in Japan, South Korea and Southeast Asia, which have been reliant
in the past on China tourism and are struggling with China outbound still
lagging pre-COVID numbers.
Japan’s struggles are odd because the country has been
popular with international tourists overall, and through May, international
arrivals exceeded 2019 levels. Lighthouse said likely explanations include 2024
room rate slowing in comparison to very high rate growth in 2023 and Japan’s
second-tier destinations not performing as well.
Still, the Lighthouse study says Asia is poised for a
recovery, with improved visa and flight availability from mainland China and
surging demand in Japan over the next 12 months leading the way.