Europe's rising hotel rates
Sky-high hotel rates are nothing new in the years since the pandemic ebbed and travel returned with a bang of pent-up demand.
Lighthouse, a data intelligence company for the hospitality industry, found that Europe had the highest regional hotel pricing growth in 2023, with an 11% year-over-year rate growth in the first half of the year, followed by a 10% increase in the second half.
"After the pandemic, there was a massive backlog of interest in going to Italy," Perillo said. "Hotels saw this coming; they went two years without making money."
Perillo said he believes the higher rates and the move to turn away group bookings is temporary, but the practice is having an impact on operations.
For example, Perillo Tours is offering slightly fewer hotels in some destinations as the company looks to replace the hotels it can no longer book.
"We could get pushed into a hotel we don't necessarily love," Perillo said.
The Parco dei Principi in Sorrento is one of the hotels Perillo Tours typically uses for two nights on tours of southwestern Italy, such as its 10-day Vesuvius tour. The hotel is located on a cliffside overlooking the Bay of Naples. It has a private beach, botanical garden, terrace patio and a large swimming pool.
But when the five-star hotel stopped taking group bookings from Perillo Tours earlier this year, Perillo pivoted and found space at the Hotel Isabella across the street, a three-star hotel with not nearly as many amenities as the Parco.
Irene Capano, a tour director who has worked with Perillo Tours for 17 years, said Parco is "one of the most beautiful and luxurious hotels in Sorrento; it has the best view of Sorrento and the Bay of Naples." She noted that Perillo has used the property for decades.
Perillo said the company is currently pricing 2025 tours and working to expand its roster of four- and five-star hotels in Italy. He added that 2025 tours that include the Hotel Isabella or comparable three-star hotels will be priced differently than tours with only higher-end hotels.
Despite the change, Capano said the impact on the Perillo guest experience has been minimal since itineraries in Sorrento are full days packed with activities.
"Hotel Isabella is just a place to rest at night because we are out between Pompeii, restaurants and Capri," Capano said, adding that she doesn't think the trend of Parco excluding group bookings will last. "They will experience some difficulties sooner or later, and Perillo will come back."
By Nicole Edenedo