Global Hotel Rates
Hotel rates on the rise in Latin America, debt crisis fallout hits Eurozone
The strongest growth in hotel rates in the first half of 2012 took place in Latin America, whilst hotel prices across the Eurozone either fell or remained flat, according to the latest bi-annual hotel survey from international corporate services company Hogg Robinson Group (HRG).
Although the HRG survey reveals a fragmented global picture, the international hotel market appears to be stabilising, showing a 1% variance across the top 50 cities, compared to 4% during the same period in 2011. Twenty-three cities showed a year on year increase in rate, and three have maintained the same rate. This is compared to 33 cities which showed a year on year rate increase in 2011.
Trends noted by HRG include:
For the 8th year in a row, room rates in Moscow are far and away the highest of any destination monitored by HRG. Hotel prices in the Russian capital have risen 3% in local currency over the past year.
Lagos emerged as the second most expensive destination due to the high volume of inbound business travel to Nigeria connected with the oil industry. Travellers to Lagos are also conscious of the city’s well-documented security issues and are more inclined to stay in five-star accommodation.
Mexico City showed the highest increase in room rates at 30% in local currency, as growth in demand, coupled with a lack of new openings, drove an aggressive increase in average rates. Across the wider Latin American region, Rio de Janeiro and Sao Paulo showed rate increases of 15% and 23% respectively.
Hotel rates in India were driven down by the country’s economic slowdown and lack of capital for new investments. Mumbai showed an average room rate decrease of 7% and Bangalore 21% in local currency.
The financial crisis affected average room rates across the Eurozone, leading to rate decreases in key European cities, notably Barcelona which saw rates fall by 22% in local currency. Madrid and Dublin also showed 2% and 6% rate decreases respectively.
The UK saw a 2% room rate increase, primarily driven by high rates in London and a select number of regional cities, including Liverpool where room rates jumped by 8% following increased economic activity in the region.
Key destinations in the USA, including New York, San Francisco all saw average hotel room rates rise in the first half of 2012, as business activity increased in line with economic performance.