Affluent U.S. travellers may be sticking closer to home for their big trips this year, travel industry experts say.
Blame it on the soaring cost of travel, unease about the war in the Middle East, or a desire to avoid the headache of sold-out hotels and crowds in popular tourist destinations..Whatever the reason, numerous signs indicate that more Americans with an eye toward luxury travel are opting for domestic vacations this year compared with last, when they ventured abroad in the wake of pent-up demand following the pandemic.
Lindsey Ueberroth , the CEO of Preferred Travel Group, comprising more than 1,000 high-end hotels, says that while the group’s international business remains strong, domestic stays have grown so far in 2024, with bookings for the months ahead showing the same rise.
“Airfare is pricey, and some people are avoiding international travel because of the uncertainty in the world,” she says. “As a result, they’re spending their money on pricey resorts in the U.S. instead.”
Ueberroth noted that Brush Creek Ranch in Wyoming’s scenic North Platte River Valley and Montage Kapalua Bay in Maui are two Preferred Travel Group properties that are proving to be top choices among its clientele.
Travel advisors also report a rise in bookings of domestic getaways.
Erica Neher, an advisor with Altour in Paris, is also seeing a renewed interest in domestic getaways from her U.S.-based clients. She says she thinks that the prohibitive cost of top hotels abroad is partially a cause. “I’m hoping the hotel prices start to come down because [uber luxury] travel is becoming unattractive to even those with no or unlimited budget,” she says.
Michael Holtz, the founder and CEO of the global travel firm SmartFlyer, says that its business is up 25% so far this year compared to last.
“Our U.S. bookings are robust. Domestic travel is easier than going abroad, and it can also be less expensive yet more luxurious,” he says.
Holtz cites the all-inclusive Twin Farms in Barnard, Vermont, as an example of a coveted U.S. hotel and says that it’s a scenic resort with great accommodations, cuisine, and service—a place where “the staff accommodates every guest need or want, plus more.” Destination-wise, he says that SmartFlyer’s clients are favouring Hawaii, Jackson Hole, Charleston and Nashville for their stateside forays.
The most significant evidence that affluent travellers have returned to domestic escapes comes from luxury properties themselves, many of which saw a wane or decline in business because their usual guests chose to go abroad as the world opened up from pandemic shutdowns.
Take Post Ranch Inn, a scenic 40-room oceanfront resort in Big Sur, California, where room rates start at US$1,625 a night. Co-owner and managing partner Mike Freed says that occupancy has consistently averaged about 80% a year since the property opened in 1992. Last year was the exception when the number softened.
“There’s no question that many of my regular guests over the years opted for international travel in 2023. Most went to Europe—Italy, France, Spain, and Portugal,” Freed says. “However, they’re back in 2024. Bookings are ahead of last year and already solid for our peak summer season.”
Bill Hayward of Pebble Beach, California, and the president of a lumber company is among the return clientele. He has been staying at Post Ranch Inn since the early ’90s with his wife and says that they usually check in three times annually for between two and three nights each. “Last year, we changed it up by taking several trips to Europe,” he says. “It was catch-up travel after not doing it for so long, but now, we’re back on the Post Ranch Inn bandwagon.”
International air travel can be aggravating, Hayward says, and the couple agreed that it’s more convenient to take a break that’s closer to home.
“We pay around US$7,000 for a three-night stay. It’s cheaper than going to Europe and so much less hassle,” he says, saying the inn is their “happy place.”
Similar to the Big Sur hotel, White Elephant Resorts, inclusive of several properties on Nantucket in Massachusetts and one in Palm Beach, Florida, also saw a dip in demand in 2023, according to president Khaled Hashem . “2022 was a killer year for us with a 20% to 30% increase in business across the resorts, but in 2023, that number stayed flat depending on the property or rose marginally to 3%,” he says. “That is historically low for us as we usually go up between 7% and 8%, even during times of economic distress.”
Fast forward to today, and occupancy is up again at all resorts—Hashem says that the White Elephant in Palm Beach, where nightly room rates average US$1,200, is currently seeing 92% occupancy compared with 78% during the same period last year.
More evidence of this pattern is everywhere.
Brian Honan, the sales and marketing director for Ocean House, set on the water in Watch Hill, Rhode Island, says that currently, confirmed business on the books for the peak months of July and August is almost double what it was last year at this time. And booking pace is up approximately 40% compared to last year. “We are seeing not just increased demand but also that business is being confirmed nearly twice as fast,” Honan says.
At Baccarat New York, demand is growing even further after levelling out in 2023, says director of sales and marketing Rafael Nader. “For 2024, we may be seeing a return to 2022 levels, with our booking pace up nearly 10%,” he says. “This could be tied to a softening of the demand for European destinations, which saw hotel and airfare price points that were tremendously high, even for the luxury traveler.”
Irrespective of prices, Karon Cullen, a marketing consultant who lives in Savannah, says that travelling in America has made her recognise how “varied, beautiful, and rich” the country is. Her domestic trips have also been more enjoyable and leisure-filled. “My husband and I learned our “stay in the U.S.A.” lesson last year after too many hours in the past waiting in lines for gelatos in Capri, museums in Paris, even for the fishmonger at a tiny town in Croatia,” she says.
Cullen and her husband recently stayed in a suite at Ocean House where they savoured long beach walks and has more local escapes in the works for the months ahead.
“The more we travel in the U.S., the more we appreciate the relative ease and diminution of stress,” she says.
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Report by the San Francisco Fed shows small increase in premiums for properties further away from the sites of recent fires
Wildfires in California have grown more frequent and more catastrophic in recent years, and that’s beginning to reflect in home values, according to a report by the San Francisco Fed released Monday.
The effect on home values has grown over time, and does not appear to be offset by access to insurance. However, “being farther from past fires is associated with a boost in home value of about 2% for homes of average value,” the report said.
In the decade between 2010 and 2020, wildfires lashed 715,000 acres per year on average in California, 81% more than the 1990s. At the same time, the fires destroyed more than 10 times as many structures, with over 4,000 per year damaged by fire in the 2010s, compared with 355 in the 1990s, according to data from the United States Department of Agriculture cited by the report.
That was due in part to a number of particularly large and destructive fires in 2017 and 2018, such as the Camp and Tubbs fires, as well the number of homes built in areas vulnerable to wildfires, per the USDA account.
The Camp fire in 2018 was the most damaging in California by a wide margin, destroying over 18,000 structures, though it wasn’t even in the top 20 of the state’s largest fires by acreage. The Mendocino Complex fire earlier that same year was the largest ever at the time, in terms of area, but has since been eclipsed by even larger fires in 2020 and 2021.
As the threat of wildfires becomes more prevalent, the downward effect on home values has increased. The study compared how wildfires impacted home values before and after 2017, and found that in the latter period studied—from 2018 and 2021—homes farther from a recent wildfire earned a premium of roughly $15,000 to $20,000 over similar homes, about $10,000 more than prior to 2017.
The effect was especially pronounced in the mountainous areas around Los Angeles and the Sierra Nevada mountains, since they were closer to where wildfires burned, per the report.
The study also checked whether insurance was enough to offset the hit to values, but found its effect negligible. That was true for both public and private insurance options, even though private options provide broader coverage than the state’s FAIR Plan, which acts as an insurer of last resort and provides coverage for the structure only, not its contents or other types of damages covered by typical homeowners insurance.
“While having insurance can help mitigate some of the costs associated with fire episodes, our results suggest that insurance does little to improve the adverse effects on property values,” the report said.
While wildfires affect homes across the spectrum of values, many luxury homes in California tend to be located in areas particularly vulnerable to the threat of fire.
“From my experience, the high-end homes tend to be up in the hills,” said Ari Weintrub, a real estate agent with Sotheby’s in Los Angeles. “It’s up and removed from down below.”
That puts them in exposed, vegetated areas where brush or forest fires are a hazard, he said.
While the effect of wildfire risk on home values is minimal for now, it could grow over time, the report warns. “This pattern may become stronger in years to come if residential construction continues to expand into areas with higher fire risk and if trends in wildfire severity continue.”