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Online Black Friday Sales Bring In Record $9.1 Billion
Online Black Friday Sales Bring In Record $9.1 Billion

The Future of Travel is a Three-Star Hotel

Frequent trips are better than an infinity pool.

When the goal is attracting influencers and making "world's most expensive hotel" round-ups, there is no limit to how many flashy things a hotel can cram into a single space.

One Las Vegas resort that normally charges around $200 a night created a 19,000-square-foot suite with 12 beds, 25 televisions, a basketball court and an on-call butler for $150,000. (It was specifically designed to be featured on a popular YouTube show but is still available for booking by anyone who has the funds and wallet to replicate the experience.)

But back in the world of statistically average incomes, the demand is rising for a very kind of travel. According to Expedia  (EXPE) - Get Free Report's annual travel industry trend report for the coming year, demand for three-star hotels is up more than 20% between 2021 and 2022.

This trend stems not so much from a rejection of over-the-top extravagance but rather from the state of the average person's finances. Hotel prices have risen by 12% from 2021 overall and as much as 50% in certain popular destinations. 

'More Trips In Three-Star Properties'

The survey thus found that nearly 60% of travelers are concerned with "getting the right price" while booking a vacation, while 23% value low pricing above cleanliness and pandemic-related health protocols, perks, and other benefits or even the ability to get a refund in the event of travel disruptions.

In 2023, 40% of American travelers plan to stay in hotels that rank between one and three stars. That doesn't mean everyone else is staying in five-star resorts but rather that some people may be booking homes on platforms like Airbnb  (ABNB) - Get Free Report and Vrbo or staying with family to bring down expenses.

But for those who do opt for hotels, no-frills places that are clean and central often win out over hotels with many amenities but an accompanying price tag -- for many on a budget, the lowest price is always the priority while others with more spending money are still choosing more frequent trips over a single extravagant one. 

'Showing a shift in mindset from the post-pandemic bucket-list mentality and moving towards a more spontaneous approach, one-third of travelers would rather go on more trips in three-star properties than splurge on one big luxury getaway," Expedia said in a statement.

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Looking at wider travel trends from data from companies like Expedia, Hotels.com, and Vrbo, the report identified a number of other travel trends going into 2023.

Cities like Edinburgh, Lisbon, and Tokyo emerged as some of the most popular international destinations while many are also booking trips based on locations they saw in shows and movies.

The survey found that 68% considered booking a trip to a location after seeing it on their screens. This could include anything from small Spanish towns used to film HBO's "House of the Dragon" to the Hawaiian islands featured in the first season of "White Lotus."

American destinations that are picking up steam are usually not major cities but quiet getaways alongside a lake. Idaho's Nampa and North Carolina's Greensboro saw Vrbo bookings rise by more than 30% in the last year.

"We're seeing a surge in trips to culture capitals, a new wave of interest in wellness retreats and a spike in demand for outdoor destinations beyond just beaches and mountains -- not a new normal but people branching out to unexpected trends in what we're calling the 'no normal," Expedia Brands President Jon Gieselman said in a statement.