Two studies find big increases in hotel rates worldwide

A study of world hotel rates in key cities finds that accommodations are getting considerably costlier for global business travelers. The U.K.’s Hogg Robinson Group, a business travel management firm, found that hotel rates are rocketing upwards in Mumbai, with an average increase of 30 percent between January and June 2007 – and that came on top of a 49 percent increase during the 12 months of 2006.
Among other findings:

• From January 2007 to June 2007, hotel rates shot up by 18 percent in Barcelona, 17 percent in Berlin and 10 percent in Stockholm.
• The world’s most expensive city for lodging is Moscow, where the average room costs $475 a night. New York placed a distant second at $355.
• Rounding out the world’s top 10 cities with the highest hotel rates were (3) Dubai, (4) Paris, (5) Bangalore, (6) Milan, (7) Stockholm, (8) Hong Kong, (9) London and (10) Rome.
• Room rates in London rose 5 percent in the first six months of 2007, on top of a 7 percent increase in 2006.
• Room rates in Saudi Arabia posted a 21 percent year-over-year increase due to “increased demand from foreign businesses looking to invest in the economy.”

The company said that in general, rates in Europe and the Mideast are showing strong growth. “As these two particular markets have yet to reach full maturity, we expect to see the trends continue over the foreseeable future,” a spokesperson said. She added that another “key finding” of the study is “the ever-growing importance of booking in advance, particularly for travelers looking to secure the best rates. Last-minute bookers are increasingly suffering from inflated rates in the most popular locations, and clients need to ensure that they have negotiated last-room availability in their corporate rates to avoid this.”
Among U.S. cities, average rates from January 2007 to June 2007 showed the strongest increase in Houston, up 18 percent to $143, followed by Las Vegas, up 16 percent to $270; New York, up 14 percent to $355; and Denver, up 10 percent to $163.
The only region where rates declined in the first half of 2007 was Africa. The only European city that showed a decrease was Geneva, where the drop was 3 percent. Outside Europe and North America, the only declines in average rates this year were in Hong Kong and Bangalore. Rates in that Indian city dropped 7 percent “as the economy experienced a slowdown due to a plateau in its growth as a base for corporate outsourcing and international call centers,” the company said.
Meanwhile, a separate study conducted by the U.S.-based Smith Travel Research compiled hotel price changes from July 2006 to July 2007 . That study found the sharpest increases in the Middle East region, with an overall average year-over-year hike of 13.6 percent, to $143. In Europe, average daily rates grew by 12.5 percent during that 12-month period, to $155; and the average hotel rate in the Asia/Pacific region climbed by 13 percent to $129. Within that area, however, the increase was more striking in southeastern and south central Asia, with gains of more than 30 percent. The study found that hotel average daily rates increased by 23.8 percent in South America and 17.6 percent in Central America.