Demand drives rise in hotel room rates

31 August 2011

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31 August 2011 | Angeline Albert

Business travel buyers are face rising hotel rates across the globe despite their best efforts to impose travel restrictions and reduce costs.

Room prices rose by 4 per cent worldwide during the first half of 2011, according to analysis by travel management company HRG.

Of the 50 cities surveyed for the hotel reportpublished today, 33 locations experienced a year-on-year increase in hotel rates. There was strong growth in Asia, where average room rates rose by 7 per cent when compared with the same period in 2010. In London, the average cost of a room rose by 2 per cent.

Stewart Harvey, group commercial director at HRG, said in a statement: “Yet again our survey indicates how important it is for clients to keep control of their hotel programmes. Despite the fact that many large companies have put in place travel restrictions and cost reductions, hotel rates in the majority of cities surveyed increased. Demand is driving the rate.”

In Asia Pacific prices increased as a result of the region’s growing economic importance and the proliferation of financial centres across the region including Hong Kong and Singapore. This was in sharp contest to the Middle East, where supply outstripped demand leading to a fall in average rates. Key international cities - including London, New York and Paris - reported growth in prices.

“Overall, our research shows that global hotel rates are increasing and have been exhibiting signs of growth,” Margaret Bowler, director of global hotel relations at HRG. “Looking ahead, we anticipate that hotel rates will continue to rise if the economy improves.”

☛  A full analysis of hotel rates for 2012 will appear in the September edition of SM

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