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In another sign of how companies have been forced to adapt to changing economic times, the average price for an American hotel room dropped 17% (year-over-year) during the first six months of 2009. The average traveler booking a room in the U.S. can now expect to pay $115 a night, down from $139 during the first half of 2008. New York City and Washington D.C. were the priciest destinations on the list, although Las Vegas is the most popular destination. Gaming fans can grab a room in Sin City for an average of $82 per night.
David Roche, president of Hotels.com, which is part of Expedia, Inc. (NASDAQ: EXPE), told the press that "Americans' travel dollars have never gone farther than in 2009." The decline was the sharpest on record since Hotels.com created the Hotel Price Index survey.
As the nation's economy pulls out of recession, retailers -- and that includes the lodging business -- have been forced to keep prices low to help the ailing consumer. This trend is reflected in this morning's Consumer Price Index (CPI) number, which showed year-over-year prices actually declined 1.5%.
Declining room rates haven't yet had a palpable impact on the shares of publicy traded hotel names; Starwood Hotels & Resorts Worldwide (NYSE: HOT) has rallied 173% in the past six months, Marriott International (NYSE: MAR) is 75% higher since March, and Wyndham Worldwide (NYSE: WYN) has surged a phenomenal 300% in the last six months.
Beth works for The Options News Network (www.ONN.tv), which provides daily stock and options commentary. The above comments are not intended as trading advice.
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