What did the world’s wealthiest 1% get to do this past year that the 99% likely didn’t?
Stay at some of the most luxe hotels across the globe — and pay whatever the asking price for the privilege.
Luxury and ultra-luxury hotels have been commanding strong average daily rate growth in 2025.
Room rates for luxury hotels bucked an overall average daily room rate decline for the hospitality industry in the third quarter.
And in some rare instances, room rates in the ultra-luxury segment are seeing even stronger growth than luxury is, The Wall Street Journal reported.
Average daily room rates at U.S. luxury hotels reached $394 this year, a record high. That rate is $168 more than the average rate of the next priciest hotel room tier, the WSJ reported, citing CoStar data.
It is a divide that has been widening since 2008, when the difference between the luxury tier and the lower tier was a difference of $60.
U.S. revenue per available room showed a similar bifurcation in Q3. Overall RevPAR retreated by 0.1% through September, but luxury gained 2.9% in RevPAR during that period, Cushman & Wakefield reported.
Climbing operating costs, such as labor, insurance and property taxes, drove overall RevPAR down in Q3. Softer international travel into the U.S. and the federal government shutdown were also bedbugs to hotels’ bottom line, according to Cushman & Wakefield.
Jan Freitag, CoStar’s national director for hospitality market analytics, said in the CoStar report released Tuesday that the spread in the 10 most expensive hotels showed average daily rates that often doubled the rates found at most luxury hotels. In cities like Paris, London, New York and Rome, the top 10 ultra-luxury hotels are charging an average of $1,500 or more a night.
The real estate data firm said strong stock market gains and real estate value increases since the pandemic have “disproportionately favored higher-income earners,” who are spending on travel and experiences, Freitag said.
“In turn, hotels that cater to high-end travelers can charge high rates in exchange for the promise of unique locations, exclusivity and personalized service,” he said.
The luxury lure is a trend hotel executives noticed in Q3 numbers.
Braemar Hotels & Resorts Chief Financial Officer Deric Eubanks remarked on the company’s Q3 earnings call about the ultrarich’s relative imperviousness to sticker shock when it comes to luxury travel.
“I think we’ve been pleasantly surprised with just the lack of price sensitivity to that customer and how resilient they are and wanting to travel and wanting to pay for experiences,” Eubanks said during the Nov. 5 earnings call.
