20 February 2008 | Paul Snell
Hotel prices for business travellers around the world continued to rise last year, according to a study by travel management firm HRG. And the growth is set to continue in 2008.
The company said the necessity of business travel meant 2007 growth would be repeated despite any potential recession. However, any increases should be slower, as supply and demand for rooms begins to balance out.
Moscow was the most expensive city in 2007, with its average room rate reaching £248. This was up 11 per cent compared with 2006.
But it was Mumbai in India that experienced the fastest rate of growth, with prices up 37 per cent compared with the previous year. HRG said the active IT and banking sectors in the city, combined with the undersupply of rooms, had driven rates up.
Rates in all the BRIC (Brazil, Russia, India and China) nations increased, although growth in China was comparatively low. The opening of new hotels in the country led to occupancy rates in many cities to fall.
"The Chinese market operates very differently from other markets; Chinese business travellers prefer to stay in branded hotel chains that they recognise," said Margaret Bowler, director global hotel relations at HRG. "As such, western hotel chains are scrambling to establish a presence in China to encourage the growing number of Chinese business travellers to stay in their hotels when they travel overseas."
Rates in London rose 4 per cent last year, making it the tenth most expensive city in the world. Rates in Aberdeen rose fastest in the UK, up 17 per cent compared with last year.