After a period when consumers were prioritizing spending on travel and experiences regardless of the expense, hotels in some markets are now beginning to see that trend slow down as inflation persists.

Harry Carr, senior vice president of revenue management at full-service hospitality management company Davidson Hospitality Group, said at this time in 2022 there was a “champagne effect.”

Carr said the champagne effect for Davidson’s portfolio, which is composed of 84 hotels and resorts, meant that consumers were prioritizing travel above many other things, and they weren’t really concerned about the cost … regardless of the expense, [they’re] going to do it, [they’re] going to have that extra glass of champagne.

Even if the nightly rate at a mid-range hotel in Miami was $600, Carr said the consumer didn’t care.

Really, there was no price ceiling, there was no thought about ‘maybe I’ll put this off,’ and the discretionary income that they had, or the savings that they had, was banked. And it was also a little bit of ‘hey, if I’m going to work remotely, midweek I can go here, go there,’ he said.

Though it varies by market, Carr said that type of demand is now beginning to slow down in the second quarter.

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