Hotel deals are scarce this summer: TPG's tips for finding them
In case you haven't heard, it's shaping up to be an expensive summer for many travelers in the U.S.
A mix of inflation, lingering international travel restrictions in some parts of the world and geopolitical tension in Eastern Europe will keep domestic hotel costs high this summer in many American markets.
It's not much in the way of financial relief for travelers who were already paying sky-high rates the last two summers when domestic travel was often the only option.
"This is going to be more of the same. What we saw in 2020 was the Great American Road Trip, and that sort of started again in 2021," said Jan Freitag, the national director for hospitality market analytics at CoStar.
"I don't think that we expect anything to be out of the ordinary in terms of summer travel that we didn't see in 2020, which means sustained demand for beach destinations, drive-to destinations and resort hotels."
The difference this summer is that travel confidence is likely going to hit a new high relative to the last two years. Indoor mask mandates are being dropped, and a combination of vaccines and therapeutic treatments led many state and municipal leaders to view the pandemic as entering an endemic phase — meaning the disease hasn't gone away but mainly has regional outbreaks akin to the flu.
In the next six months, 73% of Americans plan to travel, up from 62% just one year ago, according to MMGY Travel Intelligence.
But room rates are already sky-high in many drive-to and leisure destinations in the U.S. without factoring in the expected increase in demand.
The most in-demand destinations
The Florida Keys, at just over 90%, has the nation's highest average occupancy rate and second-highest average daily rates, at $599.33, according to STR data. The highest daily room rates belong to the Hawaiian island of Maui, which commands average rates of $605.77 per night.
Florida and Hawaii dominate nine of the top 10 slots of STR's ranking of highest room rates in the U.S. at the moment. But the broader "Colorado area," which includes national parks and ski resort markets such as Vail and Aspen, comes in eighth place at $279.08.
Various Florida markets account for the top nine spots in terms of occupancy, but Phoenix came in 10th place with a nearly 82.3% average occupancy rate.
"Resort hotels … are full and charging whatever they want. The consumer coming out of this slowdown aren't price sensitive. It's a very unusual recovery, and people can charge whatever they want," Barry Sternlicht, former CEO of Starwood Hotels & Resorts and founder and CEO of investment group Starwood Capital, said on CNBC in early April. "Luxury goods, whether it's wine or exclusive travel … There is definitely pent-up demand, and I'm actually astonished at the pace and rates hotels are able to charge right now."
Avoiding the crowds and high prices
For people seeking deals heading into the summer, one of the more surprising bargains at the moment, per STR's data, includes the "Tennessee area" stretching from Memphis in the western part of the state to Knoxville and points farther east in the Appalachian Mountains.
Rates averaged $89.16 per night, but this is likely more to do with the fact that the number encompasses the entire state. So, think about visiting Dollywood in Pigeon Forge or Graceland in Memphis as a lower-cost alternative to the extraordinarily popular Nashville.
Steering clear of some of the usual high-demand destinations from the last two summers is likely key in not making a massive dent in your wallet.
The town of Kailua-Kona on Hawaii's Big Island currently tops the month of April in terms of demand, based on forward-looking occupancy data from travel technology provider Amadeus. The town already has a 76.1% occupancy rate through the end of the month and average room rates of $692.22.
And that's not even where you'll find the highest room rates looking ahead to the end of the month.
That honor goes to Kahului, on the island of Maui, where rates are averaging $767.35. Other popular destinations include Palm Springs, California; New Orleans; and San Diego — though that trio is a bargain relative to the Hawaiian destinations.
Palm Springs room rates average nearly $354 per night through the end of the month while the Big Easy comes in at $233.78, and San Diego rates averaged $233.47. The lowest room rates of the most popular destinations are found in Orlando, where Amadeus shows prices averaging $193.79.
But a spokesperson for Amadeus notes a lot of this can still change on a lark. While the travel recovery continues, the shorter booking windows made common during the first summer of the pandemic haven't gone away entirely.
"Short booking lead times have been one of the most impactful trends of the past two years, with the majority of hotel reservations made just 0-7 days in advance during the pandemic," the Amadeus spokesperson said via email. "However, this indicator continues to improve, allowing a significant opportunity for occupancy to increase throughout the month of April and into the summer travel season."
Bottom line
Things can change rapidly in such an in-demand travel environment this summer, so sticking to smaller cities such as Memphis and even towns in the Great Smoky Mountains might be your best bet for scoring a deal over places like Nashville and South Florida, whether you're booking well in advance or at the last possible minute.
TPG featured card
at American Express's secure site
Terms & restrictions apply. See rates & fees.
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 5X | New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App. |
| 3X | Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines. |
| 2X | Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Pros
- Valuable dining and food-related credits
- Flexible rewards with airline and hotel transfer partners
- Multiple travel and purchase protections
- No foreign transaction fees
- Access to Amex Offers for additional savings (enrollment required)
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.