With the coming of Memorial Day weekend and the summer travel season getting underway, there are a lot of concerns about the impact of tightened budgets upon the travel industry. One stat mentioned in an article from CNN Money yesterday stated that some consumers would cut the costs of summer vacations through the types of accommodations being selected.
To see to what degree this may be happening, I created 3 categories for the major hotel chains based upon cost (value, moderate and luxury) to compare the traffic for each type. The value hotels represent the largest group in terms of overall traffic, but more importantly, also experienced the highest increase when compared to the same timeframe last year. For the week ending May 17, 2008, the weekly market share of visits to lower-priced value hotels is up 52% as compared to the same week in 2007. In comparison, with the moderate hotels, there was just a slight increase of 2% and the luxury hotels experienced a small decline of 8%. Additionally, there is an increasing gap between the market share of visits to the value hotels and moderate hotels which is at the highest point of the past 24 months.

Typical comparison shopping is also taking place with the most prevalent cross-shopping happening between the value and moderate hotel chains (basically non-existent for the luxury hotels). For the moderate hotels, 10.64% of the traffic came from a website in the value hotel category and subsequently 9.36% visited immediately after for the week ending May 17, 2008. This is up from the same timeframe last year, where value hotels referred 7.77% of the traffic to the moderate hotels category, which suggests that consumers are more concerned with costs this year and opting for rooms with a lower cost.