Persistent inflation and hotel rate increases in the past year have increased pressure on hoteliers to deliver service levels commensurate with higher prices, according to a new J.D. Power study. Not every hotelier is making the grade, it appears, particularly in lower service tiers.
The average score in J.D. Power’s 2024 North America Hotel Guest Satisfaction Index Study, released on Tuesday, dropped to 647 on a 1,000-point scale from 655 one year ago. The company surveyed 39,468 travelers who stayed at hotels between May 2023 and May 2024.
Average satisfaction scores in upper North American service tiers generally remained sturdier than those in their lower counterparts. For example, year-over-year scores dipped two points in the luxury tier and increased three points for upper upscale hotels, but dropped 14 points among midscale properties and 20 in the economy tier.
J.D. Power pointed to rising prices as a factor.
“We are seeing changes in hotel guests’ travel behavior,” J.D. Power hospitality practice lead Andrea Stokes said in a statement. “With post-pandemic travel prices still elevated, it is not surprising that hotel guests say they are taking fewer trips, on average. Yet, those hotel guests are staying longer on their trips, and this puts a real focus on the hotel property for everything from room cleanliness and facilities maintenance to interactions with front desk personnel. Ultimately, traveler expectations have increased along with hotel room rates, and when hotels do not meet or exceed those expectations, the perception of value for money declines.”
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This year’s differing satisfaction perception between upper and lower hotel tiers mirrors other factors in what has been in 2024 an industry on two paths. Demand for upper-tier U.S. hotels has remained durable, fueled by stout business transient demand, but lower-tier demand has landed below estimates as middle- and lower-income Americans limit leisure travel.
J.D. Power suggested lower-tier and limited-service properties should invest to bring hotels up to the service standards that guests perceive charged rates should reflect.
“Despite having the highest average room rates, the full-service luxury and upper upscale hotel segments also outperform limited-service hotel segments on satisfaction with value for prices paid,” according to the company. “Operators of limited-service hotels should focus on guest rooms; property/facilities maintenance; and renovating older hotels to improve guests’ value perceptions, in addition to overall satisfaction.”
