So far this year, significant job cuts at many large companies have contributed to a drop in domestic leisure travel; U.S. government policy has seriously reduced the number of international travelers coming to the U.S. for both business and leisure; and the group-business market still has not yet returned to pre-pandemic levels.
At the top of the hotel food chain, though, none of these things are making a dent in demand or revenue.
At luxury properties such as Conrad, Fairmont, Four Seasons, Intercontinental, JW Marriott, Kimpton, Mandarin Oriental, Montage, Park Hyatt, Ritz-Carlton, St. Regis and Waldorf Astoria, bookings through September were 2.5% higher than last year, according to industry research firm CoStar. This bump in demand has happened even though the average daily rate across the luxury segment has risen 2.4% this year to $394, its highest ever.
“Affluent travelers, made wealthier in recent years by stock-market rallies and real-estate gains, have splurged on their stays with abandon,” according to a November 11 article in The Wall Street Journal.
For planners of board meetings, executive retreats and customer summits, the ability to book 2026 events that stay within budget might require a look at upper-upscale properties rather than luxury ones. Given that these meetings-heavy properties have been more affected by recent macroeconomic and governmental factors, Oxford Economics research finds that rates have only risen 0.4% in the past year, to $226 on average. Further, rate hikes for upper-upscale properties in 2026 and 2027 are expected to be just 1.7% and 1.8%, respectively.
There is, however, one major uncertainty for planners considering this approach to coordinating high-level meetings: Although executives are the ones who seek justification for event budgets and scrutinize ROI calculations, are they willing to be part of the solution?
