February 2, 2023

Is The Future Of Travel Really The Three-Star Hotel?

PACIFIC PALISADES, CALIFORNIA – JULY 07: (EDITORS NOTE: Image has been converted to black and…

Is The Future Of Travel Really The Three-Star Hotel?

Like Hollywood, travel is a glamor industry. Pictures of people on sunny beaches, partying on Las Vegas pool decks, clinking glasses aboard cruise ships or splashing in crystal-clear waters from Bali to Bermuda are designed to do only thing: sell travel and experiences.

Hollywood helps sell tourism too. There’s a reason why people long to walk where their favorite characters did, whether it’s an isolated peninsula in Spain where “Game of Thrones” was filmed, or fancy hotels where the women of” Sex and the City” frolicked. HBO’s “White Lotus” will no doubt drive tourists to its first and second season locations of Hawaii and Sicily.

But there is a large gap between the expansive, expensive picture the travel industry likes to paint, and the reality. In a perceptive article in The Street, “The Future of Travel is a Three-Star Hotel”, writer Veronika Bondarenkonov writes that for many properties, the goal is attracting influencers and making “world’s most expensive hotel” roundups.

She added that a “Las Vegas resort that normally charges around $200 a night created a 19,000-square-foot suite with 12 beds, 25 televisions, a basketball court and an on-call butler for $150,000.” It was created for a TV show, of course, but you can still rent it—or dream about it.

But the reality of what kind of hotel stays are growing is quite different. Bondarenkonov waded through Expedia Group (EXPE) 2023 Traveler Value Index and gleaned that demand for three-star hotels is up more than 20% between 2021 and 2022. She notes it’s not a post-COVID rejection of materialistic flash, but the state of people’s finances.

While most non-Covidians are ready to go on for their travel dreams, financial reality can get in the way. According to Bondarenkonov, hotel prices have risen by 12% from 2021, and as much as 50% in certain popular destinations. That’s not to mention airline (and gas) prices to get there.

There’s much in the Expedia report I plan to look at later. There’s the anemic return of business travel and the rather unradical sustainability desires of travelers, who hardly want to shut down airports to save the planet. But Bondarenkonov is onto something when she points out that in 2023, “40% of American travelers plan to stay in hotels that rank between one and three stars.”

Perhaps, as an Expedia official confided to me at the Expedia 2022 conference in May, the travel industry has trained consumers to always look for the lowest price in hotels, not necessarily the best value. While true, this ignores the fact that in 2022, the average personal income in the United States is $63,214, with the median income across the country was $44,225.

So, it’s not surprising that the Expedia survey found that nearly 60% of travelers are obsessed with “getting the right price” on a hotel or package, or even that almost one quarter of those surveyed, 23%, value low pricing above cleanliness. As Bondarenkonov astutely observes, people stay in one-to-three-star hotels not because they want to, but because they have to.

A cynic might say that Expedia is trying to give its low-end properties a little love. It’s hard to find a one-star hotel rating on the online travel sites (there’s some grade inflation there). I haven’t checked their star ratings lately, but I can recall at least three one-star hotel stays.

Visiting my son at Princeton, I chose a motel that turned out to be more Trenton than Ivy League. On the second floor, I was kept awake by conspiratorial whispering outside, which I responded to by pushing all available furniture against the door as an early-warning device.

On my way to a playwriting conference in Kansas, I stayed overnight in Tulsa, a city I later grew to love. However, the $60 a night hotel I’d chosen (“just for a few hours”) not only was dirty but had no hot water. Late at night, exhausted, I stayed there, took a freezing shower and failed to get a refund. “It said we had no hot water when you checked in.”

One January, I stayed at the Alexis Park hotel in Las Vegas for CES. It was raining, and the rain poured through the roof in three places, including the bed. The hotel refused to move me to another room, and the town was sold out. I stayed in the wet room and got sick. Current star rating: 3.8.

It’s hard to believe anyone actually plans to stay in a one-star hotel unless there are no other choices. Still, people want to travel and get away, whatever their financial means. The National Parks were packed again this summer, and so were many drive destinations. And despite delays and cancellations, budget airlines did a bang-up business, with numbers actually reaching pre-Covid highs.

Putting the best face on it, Expedia told Bondarenkonov, “Showing a shift in mindset from the post-pandemic bucket-list mentality and moving towards a more spontaneous approach, one-third of travelers would rather go on more trips in three-star properties than splurge on one big luxury getaway.”

So does the travel industry really need to teach consumers how to look for value, or do they already know that quite well? The travel industry’s challenge is to make those three star hotels, like the Residence Inns (Marriott) and Hampton Inns (Hilton) clean, well-lighted comfortable places, as I’ve found them. Airbnb, too, must up its game: needless deaths like this can’t happen.

If the future of travel is the three-star hotel is a clean, safe, comfortable place with workers whose priority is taking care of the guests, I look forward to it. Hollywood-style luxury is great, but most of us plan to get out of our hotel bed to see the sights.