How much for that hotel room?

November 22, 2011

Released today, Hotels.com’s Hotel Price Index (HPI) shows increased corporate demand has sparked sizeable room-rate rises in certain hotspots.

Though hotel rates in the first six months of 2011 rose by just 3 percent globally, the HPI* points to Sao Paolo’s impressive 27 percent rise, and Singapore, Hong Kong and Sydney which show double-digit price increases.

Nigel Pocklington, senior vice president, global marketing at Hotels.com says there are several factors at play here:

“The relative strength of currencies, particularly in Sydney where you have a weaker pound up against a stronger Australian Dollar… and limited supply, especially in Sao Paulo and Hong Kong, also pushed up demand and fuelled prices.”

Across BRIC nations, the HPI reveals Brazil was up 7 percent to 132 pounds, Russia was up 11 percent to 141 pounds, India was up 2 percent to 85 pounds and China was up 4 percent to 92 pounds.

Corporate demand is inelastic regarding hotel prices per se, with employers more concerned about macroscopic economic indicators, but though business travel fell alarmingly during the last recession, Pocklington reaffirms that: “Business travel has gone up 10 percent this year, and there are no signs that businesses are making the same mistakes again.”

Hotels.com (part of the Expedia group) says the survey’s findings are consistent with the Global Business Travel Association’s projection that worldwide business travel spending will rise 9.2 percent in 2011.

In a statement, the company writes: “At a time of economic turmoil in the developed world, it’s important to remember that some markets are still doing very well and outstripping the traditional powerhouses of the global economy… It’s fair to say that hotel rates are serving as a good barometer of the growing importance and popularity of cities in these rapidly-developing countries to the global business community.”

There were some surprises: A 19 percent fall in Shanghai as hoteliers re-adjusted after 2010’s World Expo event added dramatically to the city’s rooms. (Intense supply-side action was also seen in New York, with 20,000 rooms in the construction and planning phases; London tops the European chart with over 4,500 additional rooms.)

Luxury mavens should ponder the HPI’s “Where to go for 100 pounds a night” section. Marrakech and Warsaw offer five-star hotel accommodation averaging less than 100 pounds a night, but a host more, from Bangkok and Bali to Dublin and Vienna, offer four-star rooms for that price.

Budapest had the cheapest room cost per square metre at just 2.10 pounds; Dublin was the best value in the euro zone at 2.96 pounds. London was one of the most expensive cities surveyed with each square metre costing the equivalent of 5.82 pounds and Stockholm was the dearest at 8 pounds.

My gaze, however, was drawn to a light-hearted section near the end of the report looking at sleeping routines. This found that more Norwegians said they chose to sleep naked in their hotel bed than any other nation, with the British a close second. But, the Spanish get the top prize. They are the most amorous away from home, with 62 percent passing the time making love.

*The Hotels.com HPI tracks the real prices paid per hotel room (rather than advertised rates) for 125,000 properties across more than 19,000 locations around the world.  The latest HPI looks at prices in the first half of 2011 compared to those in the first half of 2010.

(Caption on blog landing page: View of a bedroom suite during the inauguration of the Mandarin Oriental hotel in Paris June 28, 2011. REUTERS/Charles Platiau)

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