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UBS study: «Prices and Earnings» 2009

Date: Mon, 08/24/2009 - 18:18


An international comparison of purchasing power in 73 cities around the globe


Oslo, Copenhagen, Zurich and Geneva named the most expensive cities; wages highest in Switzerland, Denmark and the US

  • Oslo, Copenhagen, Zurich, Geneva and Tokyo are the world's priciest cities
  • Employees in Zurich and Geneva have the highest net wages in the world
  • People in Cairo and Seoul work the longest – roughly 600 hours more per year than their peers in Western Europe
  • Crisis-driven currency fluctuations cause shifts in the rankings

UBS's "Prices and Earnings" study has dubbed Oslo, Zurich, Copenhagen, Geneva, Tokyo and New York as the world's most expensive cities based on a standardized basket of 122 goods and services. When rent prices are factored into the equation, New York, Oslo, Geneva and Tokyo emerge as especially pricey places to live. The basket costs the least in Kuala Lumpur, Manila, Delhi and Mumbai. The study was based on data collected in 73 cities around the world between March and April of this year.

Hotel & Restaurant Prices

Hotels most expensive in Tokyo and Paris

When people travel on vacation or a business trip, they generally stay in a hotel. The global average price for an overnight stay in a luxury hotel of an international standard is USD 310, including breakfast and service charges.

However, hotel prices can vary considerably from city to city. The most expensive cities for first-class accommodation are Tokyo (USD 630), Paris (USD 540) and Amsterdam (USD 520). At the other end of the spectrum, such rooms are available at five-star hotels in Jakarta for USD 140, Kuala Lumpur (USD 140) and Mexico City (USD 130). These huge variations in price reflect a host of factors, from local wage levels, the city’s image and the hotel’s location and prestige to the season (conference or holiday time) or the political situation at the time our data was collected. A region-by-region comparison reveals  that stays at African and South American deluxe hotels cost almost 20% less than the global average.

The priciest regions are Western Europe, where an overnight stay for two in a five-star hotel costs USD 360 on average, and in North America, where the average price is USD 330.

More frugal travelers can save a considerable amount of money by frequenting threestar hotels. Accommodations for two in this category are particularly cheap in Cairo, Kuala Lumpur, Jakarta and Mexico City. By contrast, Geneva, Oslo and New York are relatively expensive places to stay. The global average price for an overnight for two at a good mid-range hotel is around USD 135. Prices for three-star hotels vary by roughly the same amount as for first-class hotels.

For the 73 cities we surveyed, the average bill for a three-course restaurant meal – consisting of a starter, main course and dessert, with gratuity included but without drinks – is around USD 39. Guests in Delhi, Johannesburg, Kuala Lumpur, Manila and Rio de Janeiro dine most cheaply, for less than USD 20. The most expensive bills are received in Tokyo at USD 87. However, eating out in Oslo and Dubai is also relatively expensive.

Price of a City Break

Mexico City, Kuala Lumpur and Jakarta offer low-cost getaways

The cost of a short city break usually includes much more than just food and accommodation. Whether a trip to a foreign city turns out to be a bargain or a financial black hole depends largely on the general price level and prevailing exchange rates.

To properly compare price differences for a short stay in a major city, we put together a basket containing 10 goods and services in all. It includes an overnight stay for two at a first-class hotel, dinner for two with a bottle of wine, a taxi ride, car rental including 100 kilometers, two tickets to the theater, travel on inner-city public transport and a handful of minor expenses such as a phone call. The costliest places for this package – which does not cover travel to and from the destination – are Tokyo, London and Doha. For cheap city trips, tourists can travel to Mexico City, Kuala Lumpur and Jakarta, where a short visit costs less than USD 330.

The average worldwide price for the package is roughly USD 650. On a regional basis, Africa and South America offer the cheapest rates for the package. Mid-range regions are Oceania, Eastern Europe and Asia. The most expensive regions for a short trip are North America, the Middle East and Western Europe. The widest price gap – around 40% – was observed between cities in Asia. Western European metropolises were found to have the lowest price gap. Here, the average cost of a short stay varies by only around 13%.

To read the complete survey please click here!

About the Study
Prices and Earnings has been published every three years since 1970. It is aimed at globally active business clients as well as private clients with an international focus. In a globalized world, price and wage comparisons are important and are additionally of particular interest to tourists and business travelers. Based on a unique survey of correspondents in 73 major cities across the globe, Prices and Earnings provides a comprehensive comparison of prices (122 goods and services plus apartment rents), incomes, income taxes, working hours and vacation days for 14 different occupations. A ranking of relative purchasing power, and thus the living standard for each of the 73 cities in the survey, is derived from this data.