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Why Are Hotels So Expensive? (10 Reasons)


If you’re taking a vacation somewhere, part of your planning involves booking a hotel, but it isn’t always easy to book a hotel.

Not only does it need good reviews, but it also needs to be within a close distance of the activities you want to pursue.

On top of that, booking hotels can be pretty expensive.

Considering how many people pass through hotels, you may wonder why they charge such high prices.


Why Are Hotels So Expensive? (10 Reasons)

Hotel room


The average price of a hotel room per night is $125.

Certain luxury hotels, however, can cost $500 a night or more.

The location of the hotel, its services, and the quality of the room can all make hotel rooms more expensive.


1. Downtown Location

Bed maid-up with white pillows and bed sheets in cozy room


One of the main reasons why hotels are expensive is if they’re in a downtown area.

Downtown hotels tend to be more expensive than hotels on the city outskirts for a few reasons.

The first is that those hotels are in a lot of competition with other businesses.

Everyone wants a building in a downtown area.

There is a greater chance of getting customers since there’s a lot of foot traffic.

As a result, the cost of renting a lot in a downtown area is quite expensive.

Whether the hotel buys the land outright or pays a landlord through rent, they’re going to be paying a lot of money for the land alone.

That’s because it’s a convenient place to stay for a lot of people.

Visitors prefer to stay in the city rather than outside it.

It means they can rely on public transport or get to certain places on foot.

Since it’s more convenient for them, they’re more likely to stay in those hotels.

Because of the convenience of its downtown location and high rent costs, hotels that are in downtown areas tend to be more expensive.


2. Close To Big Attraction

Young woman traveler opening the curtains and looking at the view from the window of a hotel room while on summer vacation


Another reason hotels can be expensive is when they’re close to a big attraction.

For example, if a hotel isn’t in the downtown area but happens to be close to some sort of building or place that draws a lot of visitors, then it’s an in-demand hotel.

Hotels that are close to national landmarks, for example, or national parks tend to be expensive.

That’s because they’re close to the attraction that a lot of people came to see.

It helps the visitors save time on traveling to that attraction.

Since it helps them save time, they can spend more of that time either at the attraction or doing other things, too.

It comes back to being a convenient place to stay.

Since it’s convenient, hotels can charge their guests a bit more.

They know that because it’s more convenient for the visitors to stay in their hotel, they’re going to be willing to pay a higher price.

In addition, those hotels are usually only drawing visitors who are specifically there to see that attraction.

They can’t rely on other types of business.

For example, a hotel in a downtown area can rely on business executives, families, and all sorts of visitors to stay at their hotel.

A hotel that’s by a landmark likely relies on visitors who are specifically there to see the landmark.

As a result, they have to make as much money off those visitors as they can.


3. Offers Spa Services

Young woman lying with closed eyes


Some hotels also offer spa services.

You’ll often find spas in luxury hotels and resorts.

These locations want to make their guests feel as pampered and relaxed as possible.

They understand the toll that traveling can take.

Depending on the hotel in question, they might offer a limited or robust selection of spa services.

For example, some might have a massage parlor.

Others might have a booth available for manicure and pedicure treatments.

Some might even have more advanced spa treatments available like tanning booths.

All these additional services cost the hotel more money.

Not only do they need to pay additional staff members, but they also need to pay for the tools and resources to provide those services.

They’ll need oils, paints, and other spa-related items.

Then they have electricity and other utility expenses to consider.

The more advanced the spa is, the more expensive it is to operate.

As such, hotels with spa services tend to be quite expensive.


4. Offers Professional Room Service

Breakfast in bed, cozy hotel room. concept


Some hotels also offer professional room service.

Most hotels offer some sort of room service.

However, the quality of that room service tends to correlate with the price of the hotel room.

Cheap hotels tend to have limited options and services.

For example, they might only have a few menu options.

They might also only have a few staff members available to assist you with your room service.

More expensive hotels, on the other hand, tend to pull out all the stops.

Not only do they usually have larger menus, but the food is usually at a higher standard, too.

They might even have a professional chef on hand to cook that food for you.

The food might be fresh and come to your room on an elegant platter.

The more work that goes into their room service, the more expensive the hotel tends to be.

That’s because they’re taking on more costs to provide that sort of experience to you.


5. Room Size

Bedroom interior the morning


The size of the room that you book can also impact the price.

Hotels tend to have a few options.

You have standard suites that usually have a single queen bed.

You can even find cheaper rooms that come with twin beds.

The more expensive hotel rooms tend to have more beds and bigger spaces.

For example, some of the most expensive hotels have rooms with their own kitchens.

There might be a small fridge, an oven, and even a dishwasher.

You’re essentially renting out a small house while on vacation.

The reason larger rooms are more expensive has to do with space.

Hotels have a limited amount of space in which to put rooms.

Since they rely on making money by having as many rooms filled as possible, larger rooms mean there’s less room for more guests.

That larger room could have split into two or three other rooms which would have earned the hotel more money.

To make up for that, they charge more money for the larger room.

In addition, some hotels also believe that larger rooms are going to go towards a family or group of friends traveling together.

There’s a good chance that they’ll be sharing the cost of the room between themselves.

As such, it makes it cheaper for everyone.

Because they’re sharing the cost, the hotel can charge them a bit more since it’s still affordable for them.

Hotels are expensive when you book a large room.


6. Room Quality

Interior of hotel apartment, bedroom


The quality of the room is another factor that makes hotels expensive.

Whenever you stay at a hotel, there’s always that dreaded question as to if the room has bed bugs in it or not.

A more expensive hotel tends to put extra care in ensuring they remove any pests between visitors.

The more expensive the hotel is, the cleaner it usually is.

The state of the beds is another factor.

Cheap hotels tend to have basic pillows and sheets.

More expensive hotels tend to have high-quality pillows, mattresses, and incredible sheets.

They want to ensure you feel as though you’re sleeping on a cloud.

Some high-quality rooms also come with balconies to overlook gorgeous views.

Others have a large bathroom with a hot tub.

The more stuff in your room, the more expensive it’s going to be.

You’re essentially paying for more luxuries.


7. Resort Amenities

beautiful swimming pool in tropical resort , Phuket, Thailand.


Some hotels offer a lot of amenities.

For example, they might have a gym, business center, or even a swimming pool.

All these amenities cost the hotel more money.

They have to buy that expensive gym equipment and maintain it.

Some hotels might even have a trainer on hand or offer classes.

Business centers need to have high-quality internet services and quiet rooms.

The hotel thus needs to invest in high-quality internet and ensure that they build their business center with acoustics in mind.

Swimming pools are quite expensive.

Not only do they take up more room, but they’re expensive to maintain.

The hotel has to wash it regularly and ensure its pH is at normal levels.

They also usually need a lifeguard on duty to prevent any unfortunate accidents.

Some hotels have even more lavish amenities beyond that.

Even simpler amenities like having a shuttle that takes you from the hotel to the airport or any other destination add more cost to the hotel.

They need to pay the driver, fuel costs, and maintain the bus.

Since it costs them more money to provide those additional services, they’re going to charge their guests more money.


8. In-House Restaurant

japanese chefs are cooking in the restaurant the most popular delicious japanese snack food in Japan.


A popular feature that many hotels have is an in-house restaurant.

The goal of an in-house restaurant is to encourage guests to remain on-site rather than leave the hotel.

By choosing to eat at the restaurant, the hotel can make a bit more money off them.

However, operating a restaurant isn’t cheap.

For one, the hotel has to consider food costs.

They need either fresh food or food that comes in good enough quality to pass off as fresh food.

They also need an experienced chef to cook the food.

They’ll need waiters and other staff to meet the needs of their guests.

Restaurants also take up space.

That means less space for beds.

All these factors together equate to more costs and higher hotel prices.

The quality of the restaurant also makes some hotels more expensive than others.

Hotels that have an executive chef, or even a celebrity chef, will be more expensive than others.

For one, having that chef in their employ is going to be expensive.

The hotel also knows that some visitors are going to stay at their hotel specifically because of the chef.

Since they won’t be able to receive service from that chef anywhere else, the hotel can charge them a bit extra for their rooms.


9. Personal Attention

hotel receptionists standing together in front of counter and looking at camera


Some people are also willing to pay more for receiving personal attention from their hotel.

At cheaper hotels, you can often feel more like just a room number than an actual person.

The receptionist gives you a key, and then you’re left to your own devices.

At more expensive hotels, the staff tries to make you feel seen and heard.

That might mean you receive towels that come embroidered with your initials.

It might mean you enter the room for the first time to find a wine on ice waiting for you.

Some hotels even have private entrances that their frequent guests can use.

They might provide a special car for you to use or offer other incredible services.

Essentially, because a hotel is focusing so much of its attention on just you, you’re going to have to pay for that extra attention.


10. Operational Costs

Businessman making booking at front desk with Latin receptionists in hotel lobby


In general, hotels are expensive when they have high operational costs.

The more services, staff members, amenities, and utilities that they have, the more bills they need to pay.

That even goes for maintenance.

If a hotel used expensive materials in which to make its lobby or rooms, then it’s going to need to continue to invest in expensive materials to maintain the original ones.

Their expenses rarely let up.

If there’s a lot of staff on hand, clerks, bell boys, valets, elevator monitors, chefs, and maids, for example, then that’s more people that they need to pay.

The higher a hotel’s costs, the more expensive its rooms are going to be.



Hotels can be expensive places to stay in.

Choosing to stay in a hotel that has any of the above factors means you’re probably going to be paying for an expensive room.

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