Luxury travellers are beginning to show price resistance as hotel rates soar across Europe.
Panellists at Preferred Hotels and Resorts’ Global Conference 2024 agreed that there had been a shift in the market, reports Travel Weekly.
“I find a lot of customers are feeling the pain of increased pricing in markets like Italy, so we now see our customers moving toward destinations that offer more value for money,” said Silvio Rebmann, CEO and founder of German company, Cube Travel.
While high- and ultra-high-nett-worth individuals have proved resilient in terms of travel spend, the panel noted that luxury travellers going to Europe might be hitting a price ceiling.
Hotel rates were no longer drastically increasing as in early post-COVID days, but prices were still steadily rising, said David Kolner, Executive Vice President of Virtuoso – a global network of travel agents. He added that high rates were unlikely to drop any time soon.
The average daily rate for Virtuoso’s preferred hotel network alone is up 50% from 2019 to 2024.
Other panellists explained that the increase was due to multiple factors.
“You have higher prices because costs increase, but you also have higher prices because demand has increased,” said Michelle Meyer, Chief Economist at MasterCard. “At some point, you have a price level where consumers are no longer as tolerant.”
Meyer said travellers were gravitating towards taking longer trips to more affordable destinations such as Turkey, Spain and Portugal.
The panel concluded that if European accommodation became any more expensive, luxury travellers may rethink their destinations and look to other regions, such as the US.
