Air Travel News
Global rate study finds room prices soaring in Latin America
An annual study of global hotel rates by the U.K.-based business travel firm Hogg Robinson Group (HRG) finds that Moscow remains the costliest destination worldwide for booking a room, but that travelers headed to key Latin American business centers might want to increase their lodging budget.
According to HRG, room rates in Moscow topped the chart for the ninth straight year in 2012, averaging $428 a night—well above second-place Lagos, Nigeria, where business travelers can expect to shell out $361 a night for a bed.
The most expensive U.S. hotels were in New York City, with an average of $349 a night. Other business destinations with average rates exceeding $300 in 2012 included Hong Kong, Zurich, Geneva, Rio de Janeiro, Paris, Sydney, Stockholm and San Francisco, HRG said.
“Brazil’s major metropolitan cities, Rio de Janeiro and Sao Paulo, showed the highest room rate increases at 19 percent and 15 percent respectively in local currency,” HRG said. “Latin America is showing strong growth in business travel, and of the top five cities with the highest rate increases, three were from the region.” The third was Mexico City, with a 9 percent increase. The company added that “hotels across Latin America have shown the strongest percentage rate increases over the past 12 months, as part of a long-term upward trend that’s showing no signs of slowing down.”
Besides the three Latin American cities, the five destinations with the highest rate increases included San Francisco, up 10 percent; and Tokyo, up 11 percent. Rates were not up across the board worldwide. HRG said that the biggest average rate decreases from 2011 to 2012 were in Washington D.C. (down 14 percent “as corporate demand softened significantly in anticipation of pending government spending decisions”); Bangalore, India (down 12 percent); Abu Dhabi (down 11 percent); Istanbul (down 10 percent) and New Delhi (down 9 percent).
“Hotels in several cities in the Middle East and India suffer with oversupply,” HRG said. “Having invested heavily in corporate travel infrastructure during the boom years, weakening demand means business travelers to these regions are benefiting from very favorable rates.”
The company said that the environment for hotel rates in North America “suggests an increasingly confident outlook” as prices there trend upward. “In North America, hotels approached negotiation season with a very bullish attitude, leading to high rate rises. Hotels are also paying more attention to cancellation deadlines, which is placing a further squeeze on rates,” HRG said. “With a lack of openings due to the major (hotel) groups focusing on other parts of the world, the squeeze on rates in likely to continue.”