Dive Brief:
- Prices for travel-related goods and services grew less than those in other sectors of the economy in August, according to the U.S. Travel Association.
- Compared to the Bureau of Labor Statistics’ Consumer Price Index, which grew 2.5% year on year in August, the U.S. Travel Association’s Travel Price Index grew only 0.9%.
- Lodging costs in the month were up year over year, growing 1.8% — unlike in June, when hotel and motel prices dipped.
Dive Insight:
Lodging prices grew month over month in August as well, up 2% from July, according to the U.S. Travel Association. The category’s prices remain significantly higher (15.1%) when compared to 2019.
Elsewhere in the travel sector, transportation prices — including motor fuel and airfare — fell by 7.1% year on year in August as gas prices were down significantly. But the recreation and food and beverage categories saw more growth than lodging, up 3.8% and 3.9%, respectively.
“With overall inflation cooling to its lowest level since 2021 and gas prices down significantly, travelers have reason to be excited about their plans, even as we conclude one of the biggest summer travel seasons ever,” said U.S. Travel Association Vice President of Research Josh Friedlander, in a statement.
High prices have affected traveler spend, U.S. Travel Association President and CEO Geoff Freeman said in June, adding that price dips could allow the industry to “boost volume.”
But as ADRs remain strong, Deloitte predicts that a greater percentage of travelers this year will be in higher income brackets. And Morning Consult found that middle-income travelers, while still hitting the road, are opting for shorter hotel stays and budget-friendly options.
Sachin Avadhani, EY Americas’ hospitality sector leader, and Michael Selinger, EY’s senior manager of strategy and transaction, previously told Hotel Dive that competitive pricing and ADR pressures “present complexities.”
“Hotels will need to navigate these pricing strategies to remain competitive and attractive to travelers,” the experts said.
