Traveling This Summer? A Hotel Might Cost You More

Hotels prices are climbing, and travelers need to be ready for that.

Many Americans spent the summer of 2020 cooped up at home, either afraid to travel due to the pandemic or unable to travel due to ongoing restrictions. And then there were those who shied away from travel due to financial constraints. After all, many people lost work or were dealing with income loss during the pandemic and had to make sacrifices accordingly.

This summer, however, could be a lot different. The jobless rate is lower, stimulus funds have been deposited into Americans' bank accounts, and coronavirus vaccines are rolling out at a rapid pace. That could mean a summer 2021 getaway may be on the table for a lot more people.

But if you're thinking of traveling this summer, you may want to book your hotel room sooner rather than later.

Hotel prices are going up

Hotels took a serious beating in 2020 and struggled with record-low occupancy rates. As such, many hotels are eager to compensate by capitalizing on the upcoming summer travel boom -- and they won't hesitate to raise their rates if the demand is there. That means you could end up paying a lot more money for a hotel stay than you may have anticipated.

Over the past 30 to 45 days, average hotel prices have risen noticeably and are now just 5% lower than they were one year ago. By contrast, just a few weeks ago, hotel prices were 11% cheaper.

Furthermore, some industry experts expect hotel prices to continue climbing as demand increases. As such, if you're planning to stay at a hotel over the summer, you may want to make your reservation now, before rates go up even more.

Now the good thing about reserving a hotel room well in advance is that many properties have very flexible cancellation policies. Often, you can book a room ahead of time and cancel just days before your stay for a full refund. That said, before you book a room, read the hotel's cancellation policy carefully so you know what you're dealing with.

It also pays to see if you can redeem hotel points on a travel rewards credit card for an even lower-cost stay -- or, better yet, a free one. But again, you may want to get moving on that now, before demand picks up even more and rooms begin to sell out. Similarly, if you have a cash back credit card or one that offers extra points on hotel stays, it pays to put your reservation on that card.

Though many people are in a much better financial position now than they were a year ago, it's still important not to bust your budget and rack up debt in the course of traveling. And that's why booking your hotel stay now, before prices really climb, is a good idea. Also, by locking in your room rate now, you'll have a better sense of how much you can afford to spend on other aspects of your trip, which could help you stay within your budget and avoid going overboard.