The strongest increase in hotel rates across 2010 took place in Africa and Asia Pacific, whilst European hotel prices fell for the second consecutive year, according to the latest annual hotel survey from Hogg Robinson Group (HRG), the world class corporate travel services company. In an encouraging sign for the global economy, over half of the cities surveyed showed an increased year on year average room rate as global recovery was powered by growth in emerging markets…
The strongest increase in hotel rates across 2010 took place in Africa and Asia Pacific, whilst European hotel prices fell for the second consecutive year, according to the latest annual hotel survey from Hogg Robinson Group (HRG), the world class corporate travel services company. In an encouraging sign for the global economy, over half of the cities surveyed showed an increased year on year average room rate as global recovery was powered by growth in emerging markets.
Trends noted by HRG include:
- Moscow, for the sixth consecutive year, continues to be the city with the highest average room rates globally, although its rates experienced a 3% decline in GBP, or 12% decline in local currency, year on year.
- European hotel prices fell for the second consecutive year as many countries experienced sluggish economic growth. In bailed out markets such as Athens and Dublin, year on year room rates decreased by 9% and 11% respectively.
- The UK bucked the trend across Europe as most hotel prices returned to growth. London room rates increased by 3% in 2010, as the recovery of the banking and finance sector resulted in higher corporate demand and GBP weakness attracted foreign leisure travellers.
- In Africa and Asia Pacific average hotel prices rose to above pre-recession levels and many of the strongest 2010 rates of growth were in emerging markets.
- US and Canadian hotel rates, particularly in Washington DC and Montreal, increased as currency rates appreciated. New York saw a dramatic increase in average room rate, rising from a decrease of 9% in 2009 to a 4% increase in 2010.
- The Middle East experienced the greatest regional decrease in average room rates due to enduring economic problems in the area. Abu Dhabi, which last year was ranked second in the highest room rates, dropped to 19th with a rate decrease of 25%.
- Room rate variances globally were heavily aligned to star ratings in 2010. Budget and 5 star hotels both reported increased variance room rates, whilst 3 and 4 star hotels remained stagnant.
Stewart Harvey, Commercial Director at HRG, says: “As HRG experiences a return in business travel volume and hotel prices increase, many corporate clients are determined to retain control of their travel spend. The tight business travel policies and budgets from the last few years have remained in place and corporations have adopted improved compliance controls and sharper forecasting models. Particularly with hotel business bookings worldwide, corporations need dependent data tools in order to understand their expenditure and ensure strong negotiating power. HRG is committed to providing reporting services that provide accurate data and good analysis to ensure that this is a reality and a benefit for our clients.”
Margaret Bowler, Director of Global Hotel Relations at HRG, says: “Of the 75 cities we surveyed, more than half recorded room rate increases, reflecting the improving – albeit tentative – levels of business confidence. Of course, particular countries and regions are emerging quicker than others from recession but there are definite signs of increasing room rates, which go hand in hand with increasing business travel. HRG continues to advise its clients on how to get the best from their travel budgets.”
Douglas McWilliams, Chief Executive of cebr (the Centre for Economics and Business Research ltd.), a leading economic think tank who analysed the HRG survey, comments: “‘The global economy recovered strongly in 2010, powered by the emerging markets. The latest HRG Hotel Survey illustrates how the upswing has bolstered hotel prices, particularly in the fast growing emerging markets in the South and East as economic power moves away from the West.
“Resource rich economies, such as Australia and Canada, saw large gains in hotel prices reflecting healthy recoveries in their economies and accompanying currency appreciation, but generally the recovery in advanced economies has been more muted. Many of the crisis-hit cities in Europe saw hotel prices decline in 2010 with falls in Athens, Dublin, Lisbon and Madrid as the sovereign debt crisis and fiscal austerity programs hammered the economies of Greece, Ireland, Portugal and Spain respectively.
“In the United Kingdom, the economic recovery in 2010 was reflected clearly in the hotel market as hotel prices returned to growth following sharp decline in 2009 but there are wide variations across the regions with cities more reliant on the public sector experiencing declines in price.”
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