Soaring gas prices (and hotel rates)

Memorial day for the last couple of years has brought on consumer angst driven by gravity defying gas prices. This year appears no different with gas stations registering yet another high with parts of California selling gas at nearly $4.00 per gallon. Gasbuddy.com has a “national gas temperature map” showing red hot (in terms of prices) areas near the CA-NV border. The spate of newspaper articles on whether high gas prices will deter Americans from traveling are a reprise from recent years. But as in the past, all indications are that business is going to be good for all industries that benefit from the itinerant urge of Americans and hotels, unlike in ’05 and ’06, are doing little to assuage sticker shock either at the gas pump or the front desk. Few, if any, hotels are offering rebates and coupons for high gas prices and, in fact, consumers are going to face higher hotel prices as compared to last year almost anywhere in the US.

Two aspects that domestic consumers can derive some solace from are that gas prices are, still, in most instances, nearly half of what consumers pay in parts of Europe and the fact that American hotels provide far more for the consumer at almost any level of the market. Most Europeans hotels, particularly in city centers, are mere closets in terms of size and offer far fewer amenities for comparable hostelry in the US and charge materially more – London’s average room rate, for instance, is as high as $238.

Published by

Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.

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