Even high-end travelers are pulling back on their vacation spending.
They want to pay no more than $500 a night for a hotel, and they aren't interested in paying extra for greener or fancier options, according to the latest MLIV Pulse survey with 465 respondents, a little more than half from the U.S. and Canada and a quarter from Europe.
This could be a reflection of diminishing consumer confidence or complaints that inflated pricing hasn't been accompanied by a proportionate increase in service quality.
Some 69% of poll participants said their maximum budget per hotel room night was $500, while 24% were willing to spend up to $1,000. Still, 5% set their limit at $2,000, and 2% continue to entertain spending $3,000 per night or more. Respondents include traders, portfolio managers, senior managers and retail investors.
Although $500 to $1,000 per night for a room might sound high, that range eliminates the fanciest hotels in most major markets, let alone suites or larger rooms at mid-tier properties.
According to data from Google, typical prices for five-star hotels in New York are $523 to $999 per night in April and May. In Paris that number is higher, ranging from $707 to $1,382. In St. Barts, where late spring constitutes the tail end of the season, the typical price range for a top-end hotel stretches up to $1,451.
The results of the survey suggest that luxury hotels, restaurants and airlines will face increasingly irritated consumers this summer.
Bank failures, fast inflation, elevated mortgage payments and a softening labor market, especially in high-income sectors such as tech, could see tourists keep discretionary spending in check. Travelers are watching their wallets, even after personal incomes rose faster than prices in the 12 months through February.
Limited appetite for excessive spending will probably also make some travelers balk at elevated airfares. Some airlines, like Deutsche Lufthansa, deliberately kept capacity in check, hoping pent-up, price-agnostic tourists would be willing to pay through their noses to get to desired destinations.
Another trend busted by the findings of the survey is the continued growth of "bleisure" travel, in which travelers tack vacation days onto a work trip to enjoy their business destination at leisure; 62% of professional investors and 56% of retail investors said this isn't something that they're doing more of this year.