Five star hotels and high-end resorts rely on travels that are willing to pay extra for a luxury experience. But even those kinds of travels, the ones that presumably have money to burn, have their limits these days.
March is when many people begin locking in their summer vacation plans, and according to the latest MLIV Pulse survey of 465 respondents, including a mix of traders, portfolio managers, senior managers and retail investors, a little more than half from the U.S. and Canada and a quarter from Europe, everyone is taking a close look at their travel budget and pulling back these days, and that includes people prone to splashing out on vacation, as it were.
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The travel industry is currently being roiled by consumer concerns ranging from fears of a recession (a situation only exacerbated by the recent collapse of Silicon Valley Bank), diminishing confidence in the economy, and complaints that while prices for hotels have been rising, they haven’t been accompanied by a proportionate increase in service quality.
The fallout is that while people are willing to travel, they’re setting strict limits on what they are willing to pay for, with 69% of poll participants saying their maximum budget per hotel room night was $500, and 24% were willing to spend up to $1,000.
Only 5% were willing to go up to $2,000 per night, and 2% could go up to $3,000 per night or more.
$500 to $1,000 per night is fairly standard for a five-star hotel room in a major city like New York or Chicago, and the results of the survey show that luxury hotels, restaurants and airlines will face increasingly face consumers who are unhappy about rising prices this summer, and will be reluctant to upgrade for further amenities, as the survey indicated that only 7% were willing to go all out for a trip, and only 25% would be up for spending money to take things up one notch.
