Strictly Business is Becoming Nicer

Grand Hyatt at SFO suite: ready for a business meet

In my working days I would sometimes stay at airport hotels. Reasons were specific: only one or two business meetings, no time to tour the host city and/or dine at a nice restaurant, and a tight calendar that necessitated going to the next destination after meetings were over. (Keeping costs down was a factor but not as important as the others.)

One may think that the popularity of video conferencing would have damaged the airport-hotel business model, but one would be wrong:

The Grand Hyatt SFO was charging nearly $500 for a one-night weekday stay in late May.

Luxury hotels inside airports, not to be confused with those clusters of budget-friendly chain hotels a free shuttle ride away, are having a moment. Affluent vacationers and business travelers are splurging before or after a flight in the same way they are paying up for cushier plane seats with more perks.

Hoteliers say they are selling convenience, service and amenities you won’t find in that airport SpringHill Suites or Hampton Inn—bathrobes, craft cocktails and fine dining. And guests are buying.

The 351-room Grand Hyatt SFO, which opened in late 2019, posted its highest monthly occupancy rate (84%) and average daily rate ($362) last fall. It finished the year with significantly better metrics than the overall San Francisco hotel market, according to reports by the airport commission. The hotel and airport are owned by the city.

At the Westin Denver International Airport, also a city-owned hotel, the average daily rate last year rose to $337.39, up 5.3% from 2023 and 15% from 2022, according to the city. Officials say rates have held up through the first five months of this year despite economic uncertainty.

At Dallas Fort Worth International Airport, the 20-year-old Grand Hyatt DFW in July will begin a $34 million makeover that includes new rooms, room renovations and a restaurant and fitness-center overhaul.

One of the joys of non-business travel is the opportunity to walk around the host city. Staying in Waikiki or Union Square for me is vastly preferable to lodging in HNL or SFO, respectively, so the improving economics of airport hotels is likely due to business travel. It does make some logical sense--business people fly less frequently, but when they do everything is first class. However, more analysis is definitely called for.