Have Luxury Hotels Gotten Too Expensive?

The cheapest room at the Dorchester , the cosseting luxury hotel in London's posh Mayfair neighborhood, in late October is $1,455. The 323-square-foot Classic comes with a double-sink vanity, a king-size bed, free Wi-Fi, and a coffee-and-tea station. That rate even includes taxes, not exactly a given these days. Still, $1,455 for an entry-level hotel room seems a bit of a stretch—or does it?

The same night at Shangri-La the Shard costs $875. Mandarin Oriental Hyde Park is selling its most basic accommodation for $1,280. Raffles London at the OWO is $1,333.

Are these rates outrageous? Have hoteliers lost the plot? Or are these prices a reflection of our new reality?

The answer, industry insiders say, is all of the above. "A lot of people did get greedy and carried away with pricing," says Jack Ezon, a member of the T+L Travel Advisory Board (TAB) and cofounder of the agency Embark Beyond. "But costs are up at least 30 percent since 2020. The cost of everything, from energy to food to labor, has gone up, so rates have to go up, too."

That new reality explains why, in many of the world's most popular destinations, it's not uncommon to see hotel rooms selling for $3,000 or even $4,000 a night. "There is definitely no pushback from our clients when rates are $2,000 a night, because that's the new bargain destination," Ezon says. "Yes, it has come to that."

THE FIVE-FIGURE HOTEL STAY

While some ultrawealthy clients may not blink at the idea of spending more than $10,000 a week on a room, many other travelers are being more deliberative about where they choose to travel, several travel advisors tell T+L. "Asking $3,000 a night and then charging for the minibar is bad," says Paul Tumpowsky, the chief revenue officer at Fora Travel and a TAB member. "But at Passalacqua, for example, in Italy, you can pour your own Negroni each evening if you wish. I'm convinced that it's the best hotel in the world, because they are really trying to do something different."

He adds that "smaller independent hotels create value that shows up as true hospitality—warmth that feels like you are a guest in a home. At Dar Ahlam, in Morocco, or Cheval Blanc St-Barth, everything is always tailored to you."

Other advisors see travelers becoming more willing to experiment with new brands or new-to-them destinations. "Clients tend to be more deliberate in their choice and are more open to switching," says Rob Clabbers, another TAB member and the founder of Q Cruise + Travel. Vacationers are forgoing that grande-dame hotel and instead opting for a new property; they're also "moving away from the Amalfi Coast—maybe to the Adriatic, or to one of the lakes," he observes.

Still others are sticking with their plans in spite of rising prices: "I just had a client who paid $1,450 per night at a Colorado ski resort last January," Clabbers says. "Next January, the hotel asks for $1,850 for the same room—which from the client's perspective is a significant increase." Even so, the guest ended up booking the room.

"Many consumers are willing to make trade-offs in other areas of their budgets to absorb higher travel costs," explains Christina Roman, consumer education and advocacy senior manager for Experian, the credit-reporting agency. In fact, a recent Experian survey found that only 42 percent of consumers would trade down to a lower-priced hotel to stretch their vacation dollars.

HOW TO FIND BETTER VALUE

Many advisors say that smart travelers should seek out brands that unlock exceptional experiences, even at high price points. Singita, said one advisor, "is worth it," because you get both a safari and an unparalleled hotel stay. The company's Faru Faru Lodge , in the Grumeti Game Reserve of Tanzania, for example, starts at $2,795 per person per night, with everything included.

"There are places that I still think over-deliver, even at crazy rates," Ezon says. "Take any Airelles Collection hotel, whether Château de la Messardière, Venice, Gordes, or even Les Airelles, in Courchevel. You feel like you get a bargain—even at $5,000 a night—because they overcompensate with generosity and over-the-top service."

Another advisor who would only speak anonymously agreed that Airelles has cracked the code. "Their rates are sky-high, but everyone comes away happy because they feel like there's a ton of value," this person says. "There's maybe one or two brands where the consistency is really there—Cheval Blanc, Airelles—because they have a much smaller portfolio. It's not Rosewood, Four Seasons, or Park Hyatt. You may have the best experience at one Four Seasons, but the consistency across the brand's portfolio isn't there."

As the new world of five-figure hotel stays settles in, luxury travelers are once again turning to advisors to make sense of what's really worth it and what's just expensive. As Ezon notes, "rates, no matter what, set an expectation."

A version of this story first appeared in the October 2026 issue of Travel + Leisure, under the headline "Have Luxury Hotels Gotten Too Expensive?"

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