Ali Raza
Ali Raza
Aug 27, 2018 · 3 min read

The cost of hotel room per night in largest cities of U.S.

1. The largest cities in U.S. according to population size are New York, Los Angeles, Houston, Chicago and San Diego.

2. The average cost per night in the five largest cities in U.S. is $260.27.

FINDINGS

Global hotel prices paid by travelers worldwide for hotel rooms remained steady in 2016, according to latest Hotel Price Index from Hotels.com. But in U.S. largest cities is not remained steady in 2016.

U.S. Hotel Cost Breakdown in 2016 and 2017

The average 2016 cost of a hotel room, including upper-upscale, upscale, midscale ADR(average daily rate), sales tax, occupancy tax and surcharges, according to BTN Corporate Travel Index, was $236. New York was the most expensive at $327.63 in comparison with other largest cities of United States. The average year-over-year costs change in these cites is 9.8%. The detailed table of average cost and year-over-year costs in 2016 change are as follows:

Largest U.S. Total Year-over-Year

Cities Cost Change

New York $327.63 7.4%

Los Angeles $245.46 15.7%

Houston $200.12 4.4%

San Diego $192.19 7.7%

Chicago $217.76 14.1%

Average $236 9.8%

Advito principal and VP Bob Brindley attributed the California changes to market rationalization. "There’s some additional capacity. You had, I think, a little bit of an Airbnb impact because prices were getting very, very high. The demand was still there," Brindley said of the hotel market in California in 2016, "but the market was just a little bit less crazy than it was the year before."

The effect of Airbnb is but one of the factors that make 2017 a difficult year to assess for hotel costs. Add to it President Donald Trump’s attempts, unsuccessful thus far, to restrict U.S. visitation from certain Muslim-majority countries, plus changes in the ratio of hotel rooms to demand.



As such, Brindley said, rates in corporate-negotiated hotel programs are up on average from 2016, but not sharply so. "In general, what we saw overall in the sourcing programs for the 2017 season is that it’s still a supplier-driven market, but it’s not quite as much of a supplier-driven market as the last two years were," Brindley said. "Demand is still growing; it has a slow trend up. There’s been a little bit more additional capacity in the market, and that’s tempered some of the rate increases."



The average 2017 cost of hotels rooms including all scales and taxes, was 240.27 and average year-over- year cost change is 8.92%, in largest cities of United States. The detailed table of average cost and year-over-year costs in 2016 change are as follows:

Largest U.S. Average Total Year-over-Year

Cities Cost Change

New York $385.08 17.5%

Los Angeles $256.63 4.6%

Houston $192.68 -3.7%

San Diego $191.58 -0.3%

Chicago $275.38 26.5%

Average $240.27 8.92%

Per-Room Hotel development costs

In the U.S. cities, we have bifurcated extended –stay hotels in two categories, midscale and upscale, and we have added a lifestyle/soft-brand category. Lastly, we had a large sample of dual- or triple-branded hotels in our data set. The growing popularity of these dual- and triple-branded hotels warranted a separate category. Most of these dual-branded budgets included a limited-service hotel and a select-service hotel, and the limited-service property usually offered an extended-stay product. The averages and medians reflect a broad range of development projects across the U.S., including projects in areas with low barriers to entry and in high-priced urban and resort destinations.

In conclusion, the average rate of hotels per night in largest cities of U.S. such as New York, Los Angeles, San Diego, Houston, Chicago, is $260.27. It is assumed that this average rate will increases in next few years.

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