As average Americans cut back on vacations, ultra-luxury travel is booming

While the average American is struggling to find money for vacations, wealthy travellers are splashing out on five-star stays like they’re going out of fashion.

Hilton has reported fewer room occupancies at its hotels this year as U.S. travel slumps — with households struggling under the impacts of President Donald Trump’s tariffs, rising inflation and the overall high cost of living.

However, for the rich it's a different story.

U.S. luxury hotel room rates are at a record high of $394, yet bookings for luxury properties were up 2.5 percent year-to-date through September, according to hospitality analytics firm CoStar.

CoStar explained that since the pandemic, the rapid rise in stock-market and real-estate values has given higher-income earners even more money to play with — and they’re diverting some of this into travel experiences.

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Their free-spending habits are keeping the luxury-hotel market buoyant and enabling even posher, ultra-luxury properties to charge higher prices.

Between 2019 and 2025, average daily rates in this sector increased from $1,042 to $1,561 in New York, from $1,245 to $2,600 in Paris, from $1,113 to $1,593 in London, and from $715 to $1,547 in Rome, according to CoStar.

These kinds of prices filter out most travelers and keep occupancy rates down — but ultra-luxury hotels use this outcome to their advantage, marketing the sense of space and privacy as a perk.

It also gives their staff time to fulfil the needs of fussy guests.

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CoStar explained: “Higher-end hotels sell a sense of exclusivity, so a full hotel restaurant, a busy pool deck or a spa facility with limited availability runs counter to that perception.

“In addition, having availability allows hotels to serve their high-end clientele, who may give them little or no notice before arrival.

“Lower occupancies at this price point are therefore a feature, not a bug.

“And for their guests, access — not price — is the ultimate differentiator.”