Imagine every time you go for a vacation and have to spend almost half of your budget on hotel prices. You will start thinking, what are you exactly paying for? Indeed, hotels have raised their prices much higher than they advertise. These can go up more with the hidden costs that come out of nowhere. A recent study has revealed that 80% of customers pay unexpected charges. Charges like parking fees, and resort taxes that they later discover during their checkout.
But why have hotels become an unaffordable luxury, and what is the reason for all the hidden costs? Is it the inflation or other factors that customers are not fully aware of? This article will help you look at some of the reasons behind the increasing costs of hotel stays. It will also tell you about the hidden charges that the hotel will not always disclose. Plus, you will get an idea of how these costs can further affect the overall travel budgets.
By the end of this article, you will know exactly where your money is going. Also, you will discover tips to avoid these unexpected expenses and understand hotel pricing strategies. This will ensure you make a smarter and more informed decision for your next affordable transparent hotel stay.
What are the key factors behind the rising hotel prices?
The rising price of hotels is mainly because of an increase in operational costs, inflation, and an increase in demand for travel destinations. These factors can affect both the hospitality industry and the global economy. Let us look at a few key factors behind the increase in hotel pricing and how they affect the overall cost of accommodation.
1. Inflation and Economic Tensions
These are one of the major reasons for rising hotel prices. The increase in the cost of goods and services has given many hotels a hard time to survive. They are facing high expenses for everything, be it energy or cleaning and the salary of the staff. Customers have to pay this as high booking prices.
2. High Operational Costs
Hotels are having a hard time dealing with high costs in different areas such as labour, maintenance, and services. Staff salaries in the hotel industry have hiked due to the shortage of labour in the industry. They also have to further reinvest in the new health and safety improvements. This has led to more room to increase the rates for the customers.
3. Location and real estate costs
Any hotel in high-demand areas such as airports, and the city centre is comparatively expensive. This is because of the higher value of real estate and land prices here keep on increasing. As a result, it becomes more expensive for them to maintain and build on these properties.
4. Amenities and Extra Services
Hotels are investing so much amount in giving a luxury lifestyle to its customers. From high-class spas to free restaurant meals and state-of-the-art gyms. These activities require a huge amount of maintenance and inventory. This extra cost is added to the customer bill. However, they are still willing to pay for the valuable guest experience.
Hidden costs built for the increasing price of hotels
While the first payment bill might look like the best price for your stay. Many travellers are often shocked when hidden costs shoot up their final bill. These additional costs, if not carefully examined, can affect your overall hotel stay budget. Let’s look at some of the major hidden costs that are important for the increase in the price of hotels.
- Resort fees: It is one of the common hidden costs. It covers amenities and services like Wi-Fi, gym, and swimming pool usage. It can usually rate up to $10 to $50, and it adds up quickly, especially with longer days.
- Taxes and Service Charges: These are a must-pay tax amount and it is added during the checkout. It depends entirely on the location of the hotel. Also, along with the hotel taxes it can include different taxes such as occupancy taxes or city taxes. Additionally, they ask for service charges that are not reflected at the beginning of the booking.
- Parking Fees: These are for guests who travel by car. This fee is another hidden cost that cannot be forgotten. Hotels increase the rates daily for charging in high urban areas.
- Wi-Fi and Internet: Since Wi-Fi is important for every traveller, some hotels still charge for internet in the name of ‘premium' Wi-Fi service. It is always smart to confirm if Wi-Fi is included with the booking or if there are any extra charges.
- Minibars and In-room Purchases: This is another source of hidden costs. While you can get snacks and drinks easily, you end up paying thrice the amount for what you pay outside. Some hotels do add this cost without the customer even consuming anything.
How can you find the best deal for your next hotel stay?
Hotels are constantly raising their prices, and the hidden costs are playing a major role in the hike. Between this chaos finding the best deal can sometimes be a challenge. However, research and strategic planning help you go a long way. Here are some tips to help you find the best deals for your next hotel stay.
- Book directly using the hotel website: The best way to get a good deal is to book directly on the hotel website. Many hotels give out exclusive discounts and prices to guests who book directly on the website. For example: Free Wi-Fi and breakfast. It is always good to check the hotel website for extra discounts or promotional codes.
- Bookings during off-peak seasons: Hotels offer lower prices during off-peak seasons. So, booking during off-peak seasons can be a huge advantage for a budget stay. Also, avoid booking accommodations during the weekends. This will help you get better rates.
- Check out for discounts and special offers: Many hotels offer deals on the third-party website. Discounts such as senior citizen rates, and government employee discounts can significantly reduce your overall cost. Some credit cards also offer perks such as hotel discounts or cashback on travel.
- Look out for package deals: Always try to combine your flight bookings with hotel stays, car rentals, or activities. Many third-party websites offer massive discounts on booking many travel services together.
Future Trends in the Hotel Pricing
Hotels have to be more transparent with their pricing models. Customers are becoming more aware of the hidden costs and the taxes that are not conveyed during the check-in. As a result, customers are demanding an upfront and all-inclusive rate which is the true cost of the stay. The industry will likely renew its pricing strategy to a “transparent pricing” model where all the taxes, fees, and additional costs will be in the advertised price. This will help guests to be aware of the prices and make it easier for them to compare prices across different platforms.
Furthermore, technology is playing a huge role in shaping the pricing policies of hotels. Recent changes such as the use of a dynamic pricing model which adjusts the prices of rooms based on real-time data are being adopted across different hotel chains. Using algorithms and artificial intelligence is beneficial for both the hotel and its customers. While they can adjust the price in real time, customers will have a chance to get the best deals if they can book at the right time. This shift is meant to increase in the future as the industry succeeds in gaining large amounts of data with the help of AI to offer more competitive rates.
Conclusion
Recently, there has been a significant rise in the price of hotels. Understanding the factors behind the increase and its hidden costs will put you in a better position to make an informed decision. Industry trends such as transparent pricing models and technology-driven pricing methods are turning out to be game changers. Customers can now get more competitive and best options in the future. Also, with proper planning and effective booking strategies, you can get the best value for money.
If you want to learn in detail about the complex pricing of hotels, contract management, or ways to thrive in the hospitality industry, then the College of Contract Management has got you covered. The College offers detailed courses which will provide you with important skills. Moreover, their programmes are the best for those looking to excel in construction, hospitality, or contract management. Take the chance to learn how you can get ahead in your field. Don’t forget to check out their website and start your journey today!
