Continued Hotel Rate Hikes Will Favor Vacation Rentals
Oct. 18, 2006. Hotel rates are expected to rise 6.5% next year despite a slowdown in the economy, according to the travel industry's main trade group, as reported in the South Florida Sun Sentinel.
Dr. Suzanne Cook, vice president for research at the Travel Industry Association of America, says that hotels will continue to raise rates aggressively, as demand for rooms exceeds supply.
Cook said that nationwide tourism expenditures are expected to grow 7.5 percent this year to $702.5 billion before moderating next year to 5.3 percent, reaching $739.6 billion. Those figures are not adjusted to account for inflation. She added that, "Over the next few years we expect growth in spending to slow, but still to have positive growth in spending."
Cook indicated that she expects no growth in the number of business trips this year and only 1 to 2 percent growth next year. However, she had a more optimistic view of the outlook for leisure travel, projecting growth of 2 percent this year and 1 to 2 percent next year.
Ms. Cook’s forecasts are favorable to luxury vacation rentals on two counts. First, the continuing move of hotels to hike their rates up will encourage more people to consider luxury vacation rentals as an alternative. Second, the fact that leisure travel is likely to grow more than business travel favors vacation rentals
