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Global Hotel Prices Rise in Every World Region – First Time Since 2007

For the first time in five years, hotel prices have risen across all of the regions surveyed in the Hotel Price Index, despite continued political and economic instability across Europe and the US.

According to the latest HPI, which surveyed hotel prices for the first half of 2012, the average price for a hotel room, regardless of currency, rose 4% when compared to the same period in 2011. The HPI is based on bookings made on sites around the world and tracks the real prices paid per hotel room (rather than advertised rates) for around 140,000 properties across the globe.

Prices in the Pacific rose 6%, fuelled by Australia’s strong economy and sturdy corporate travel sector. Prices in Asia recovered, growing 4%, following the natural disasters, which affected the region in 2011. Prices in North America and the Caribbean rose 5% and average rates in Europe and the Middle East as well as Latin America, rose by 1%.

Johan Svanstrom, Vice President, Asia Pacific, said: “The latest HPI figures prove the hotel industry’s recovery has begun. Hotel rates are on the rise in APAC as business travel remains buoyant and leisure travel becomes more affordable and accessible with the expansion of low cost carriers throughout the region. We expect this upward movement across APAC to continue in 2013.”

Global highlights
Australian travellers experienced steep price rises in more than two thirds of the international destinations surveyed in the HPI, although price increases are not deterring Australians from travelling as they head overseas in record numbers.

Australian travellers visiting the US, a ‘darling’ destination, were met with price rises in 13 of the 15 destinations surveyed in the HPI, as the Australian dollar lost 4% in value against the US dollar in the first half of 2012. Prices rose 15% in Miami and Orlando to $208 and $118 respectively. Prices were also up 11% in Honolulu, averaging $227. New York rates, already among the highest in the world, rose 3% to $268.

In contrast, prices in many of Europe’s top destinations fell as the impact of the Eurozone crisis weakened domestic demand. Rome and Vienna were among the world’s cities to experience price falls, with rates dropping 12% to $189 and 11% to $150 respectively. Prices in Venice, one of the HPI’s most expensive destinations, suffered a 7% fall to $233. In stark contrast to other cities that recently hosted major sporting events, London hotel prices were flat in the lead-up to the Olympics, as hoteliers were forced to cut rates to fill rooms.

The world’s most expensive city for Australian travellers was Rio de Janeiro. The 2016 Olympic host city experienced a 25% increase to $294 due to its strong economy. Mexico City recorded a 50% rise to $134, while the Caribbean resort of Cancun saw prices climb by 6% to $205.

Closer to home, results were mixed. In business hubs such as Hong Kong and Singapore, prices climbed in line with demand. Rates in Hong Kong were up 13% to $195 and Singapore, the world’s eighth most expensive city, saw a relatively modest rise of 4% to $222. Popular holiday destinations in Thailand and Vietnam experienced tourist-friendly decreases. Average rates in Christchurch were up 58% to $150, as a result of a significant lack of inventory following the tragic earthquake of 2011.

Top ten biggest price rises
(% price falls by city in H1 2012 compared with H1 2011)

Table 1

Top ten biggest price falls
(% price falls by city in H1 2012 compared with H1 2011)

Table 2

Spotlight on Australia
Occupancy rates in Australia soared in the first half of 2012, the highest in a decade, as demand outstripped supply in the main business and tourist hubs. The resources boom in Western Australia affected prices in Perth, driving rates to an all-time high of $211 per night, up 21% on the first half of 2011.

The Whitsundays was Australia’s most expensive destination for accommodation, with an average nightly room rate of $252, $84 above the country’s average of $168.
Prices in major hubs, Sydney and Melbourne, were up 7% to $185 and $163 respectively.

Mr Svanstrom continued: “There are a multitude of factors driving rate rises in Australian cities, including the mining boom in WA, the strong corporate market in business centres and a lack of supply in key markets.

“With Australia’s strong economy, currency fluctuations will continue to challenge inbound tourism. Attracting China’s burgeoning outbound tourist market, and adequately catering to their unique needs, will be paramount”, he said.

Australian city breakdown in AUD:

Table 3

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