Rates are rising quickly for luxury hotels, partly because they often don’t have a lot of competition. Developers are currently opening very few new hotels targeted at the top of the market. The occupancy rate for luxury hotels has averaged 74.6 percent so far in 2018, significantly higher than for the hotel sector overall, which has averaged 66.1 percent over the same time period. Room rates have grown by 3.5 percent, and revenue per available room (RevPAR) has grown by 4.4 percent, compared to the overall figures of 2.5 percent and 2.8 percent, respectively.
The inventory of luxury hotel rooms, said the report, grew by just 0.9 percent in 2017, while the demand for such rooms grew by 1.5 percent. R. Mark Woodworth, senior managing director for CBRE Hotels, said, “Because of the development economics, there has been very little new development of luxury hotels.”
by Dan Booth