Summer Travel Costs Rise, but Deals Still Exist
Industry experts expect to see higher prices for travel this summer, although travelers can still find deals if they know where to look.
"As with every summer for the past few years, prices are coming up a little bit," said Clem Bason, President of Expedia's Hotwire Group. Hotel room rates and car rentals are the major areas where consumers can expect to see higher prices, he told CNBC's 'It's a Trip.'
The silver lining for this trend, Bason said, is that airline prices are either flat or down compared to last summer and for those who book wisely, traveling won't break the bank.
For longer trips, Bason suggests booking flights on Tuesdays or Wednesdays, when possible. "The vast majority of Americans are trying to fly on the weekends and those planes are packed fully. You're just not going to save there," he said.
Bason also recommends flying through secondary airports, which often cost less than major metropolitan hubs.
City-by-city travelers can also find deals, and Bason points to Washington, D.C. and Vancouver, Canada as great places to find value. Chicago, however, will be busy in the next few months with a number of major events, and will be "more expensive than any summer in the past few years," he said.
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The reason for rising hotel prices is due to old-fashioned supply and demand, said Ken Cruse, CEO of Sunstone Hotel Investors. Sunstone, a Southern California-based lodging real estate investment trust (REIT) that has interest in 27 hotel properties and over 11,000 rooms nationwide.
"With occupancy as high as it is, rooms are scarce," he said, which is allowing hotel operators around the country to raise prices.
Nationwide data suggests that the hotel industry has recovered and demand is nearly back at peak levels seen in 2007. Cruse says that a return to the 2007 peak in room rates is likely to follow.
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"With demand continuing to improve, our expectation is for the next 3-5 years, we'll see continued growth in demand. Most of that will translate into higher rates in our hotels, which tends to translate into much better growth and profitability for the industry," he said.
"We're kind of moving into the sweet spot of the cycle," he added.