Airlines have dominated travel headlines since the February 28 Iran conflict began, as jet fuel prices have nearly doubled and carriers have announced increased fees. United CEO Scott Kirby warned that fares could cost roughly 15 to 20% more this summer as airlines pass fuel costs through to consumers, but pointed out that continued strong demand suggests flyers are still willing to pay. The key question now is whether hotels are feeling the impact.
Consumer Edge tracks spending across more than 250 hotel brands, and in this report we group them into four pricing tiers aligned with industry convention: Luxury (e.g. Four Seasons, Ritz-Carlton), Upper Upscale / Premium (e.g. Marriott Hotels, Hyatt Regency), Midscale / Upscale Select (e.g. Courtyard By Marriott, Hampton By Hilton), and Economy / Budget (e.g. Motel 6, Super 8). The data shows that in the 35 days ending April 12, the first fully post-conflict reading, the K-shape maintained its wide gap. Luxury held up as the only tier in positive territory, followed by Upper Upscale. Midscale was the steadiest compared to the prior period, but sustained its relative softness. Economy / Budget remained the weakest tier, consistent with recent industry and company commentary.
Cutting by household income sharpens the story. For this analysis, we collapse Luxury and Upper Upscale into a combined Premium tier. Midscale posted the strongest relative trajectory, improving sequentially across most income cohorts. At $150k+ households, Midscale spend growth accelerated by 3pts, even as that same cohort pulled back on Economy (2pts deceleration) and Premium (1pt deceleration). Affluent households aren’t cutting travel; they are shifting where they stay, trading down from both premium stays and incidental budget stays into select-service/midscale.
The clearest post-conflict softening showed up in the aspirational premium segment at middle-income levels. At $60-100k households, Premium spend growth moved down 5pts after a stretch of relative strength, with Midscale the only tier accelerating in the most recent reading. The same pattern appears at under $60k households, where Premium also decelerated while Midscale was the sole tier to improve. That middle-income cohort is sensitive to discretionary travel costs, and among the most likely to pull back when fare warnings compound with gas prices and recession talk. But the emergence of Midscale as the lone accelerating tier across both lower-income bands suggests consumers aren’t cutting travel entirely so much as trading down into it.
Bottom line: one month of post-conflict hotel data isn’t enough to call a trend. Plus, hotel spending data offers a less real-time read than for airlines, as airline transactions largely charge at booking while hotel transactions are a mix of pre-pay, partial deposits, and pay-at-checkout depending on the brand and rate, so the full demand response to the conflict will likely take longer to show up in spend. The early signal is that weakness is concentrated in two specific places: the aspirational premium traveler in the middle-income bands, and incidental budget travel by higher-income households. Luxury has largely held up, and Midscale is emerging as the defensive tier, the only one accelerating across multiple income cohorts as consumers trade down rather than cut travel outright. The next few data points will determine whether this is a temporary dip or a sustained shift.
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