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Hotel Rates Are Going up ... or Are They?

Hotel costs are apt to outweigh airfares in your total vacation expenses. That's one reason reports on hotel-cost trends are so popular these days. But, as with political polls, these surveys don't always agree. Case in point:

  • According to the Hotel Price Index (HPI) published by Hotels.com, overall hotel rates in the U.S. are up 5 percent over last year. Among individual cities, rates in Charleston, South Carolina increased from $100 last year to $152 in 2012; New York was up from $190 to $205; Honolulu rates increased from $175 to $204; and San Francisco went from $135 to $153.
  • Hotwire's Trip Starter tells a somewhat different tale. Right now, says the posting, hotel rates in Charleston, at $120, are a tad lower than last year; rates in New York, at about $215, are about the same as they were last year and have been about the same all year; San Francisco rates, at about $205, are just a bit higher now but were generally higher during most of 2012. Hotwire's rates for Honolulu are "currently not available."

Which of these reports is right, or is there any "right" answer? My take is that both are right. The differences are due to use of different data sets. Both originate with online agencies and are distilled from information on actual bookings. The HPI data covers average rates for the entire year, while Hotwire's postings are on a day-by-day basis. HPI fine print doesn't specify whether the rates are limited to any class of hotels. Hotwire's are based on rates for three, three-and-a-half, and four-star hotels only.

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Over recent years, I've looked favorably on Hotwire's results for trip planning, because they cover current prices, not year-to-date prices, and they are limited to consistent hotel classes. Because rates vary so much by season, I find current (or recent) prices are a better gauge of what I might have to pay than year-to-date averages. But the HPI information is also useful.

In the final analysis, however, the figure that matters most to you is what the cost of a room is for where and when you want to visit. Averages don't matter. There's that old adage: "A statistician is someone who drowns while wading a river that averages three feet deep." And you don't often decide where to visit based on typical room costs: You decide where you want to go, then find the best deal you can. Both Hotels.com and Hotwire can help you find that information.

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