The days of cheap hotel stays are no longer. In the years since the pandemic, the price of travel has quietly been mounting thanks to a phenomenon known as vacation inflation. Demand has surged, operation costs have increased, and construction on new accommodations is lagging.
Budget hotel options have become expensive, and you can just forget about premium ones, which are now out of reach for anyone who’s not among the wealthiest of travelers, reports Forbes. Luxury hotels have shifted their business strategies, offering more exclusive experiences and widening the gap between premium and average hotels.
In this article, we’ll look at the causes for this shift, the outlook for the future, and strategies travelers can use to save money.
What does the data say?
Major city centers across the globe saw a 15- to 20-percent increase in prices over the 2024-25 year compared to the previous year. As a result, travelers are spending more but shortening the duration of their stays. In terms of the average price of a hotel room, London is the most expensive, at $247 a night, according to a report by Travala.
It’s not just hotels; every facet of traveling has become pricier. Airline tickets have surged by up to 25 percent, and the cost of rental cars was up 35 percent in 2024 compared to pre-pandemic levels, according to a report by NerdWallet.
What are the causes?
“Revenge travel” can be blamed for the surge in demand, as the pandemic made people anxious to get away. In addition, it’s become more expensive to run a hotel, with staff wages, food, taxes, and energy costs increasing.
What is the outlook like?
Luckily, numbers from 2025 look promising. While hotels are still increasing their prices, it’s at a much less alarming rate than in recent years. According to data by American Express, in New York City, the increase is around 4.7 percent, which is still higher than most other American cities, but lower than the 2023 jump of 8.5 percent. Although the Four Seasons may forever be out of reach for non-millionaires, travelers can feel generally optimistic as hotel rate increases are finally tapering off.
How to adapt to rising prices
All is not lost in the world of travel. You can still do it affordably if you budget wisely by:
Traveling in the off-season and avoiding weekends
Looking for package deals
Booking far in advance or trying your luck with last-minute deals
Joining loyalty programs
Staying outside the city center
Calling the hotel directly, as they may be able to offer a better price than what’s online
