According to the latest Hotel Price Index™ (HPI®), global hotel prices increased by 4% on average in 2011 over 2010, continuing the process of steady recovery from the lows of 2008, albeit at a distinct walking pace.

Prices fell 2% in Asia year-on-year but rose in all other areas, including 8% in the Pacific, 5% in North America, 4% in Latin America, 3% in the Caribbean and 2% in Europe and the Middle East.

David Roche, President of “The hotel sector is a good barometer for the global economy as a whole. Prices are up because demand for rooms is on the rise – a sign of higher levels of business and consumer spending. Local conditions, influenced last year by political uprisings, natural disasters and currency fluctuations, do have a major impact on prices but the momentum is there and the market is growing.”

Asia sees overall price falls despite growth in Chinese economy


There was a mixed picture in China with Beijing up 5% to HKD 742 and Hangzhou up 25% to HKD 873. However, Shanghai posted the steepest decline in prices down 23% to HKD 682. This was in large part caused by an oversupply of rooms from new construction projects and falling demand after the World Expo in 2010. Guangzhou was also down 15% to HKD 662 and Shenzhen down 7% to HKD 695.

Reduced occupancy and falling demand in Japan after the March 2011 earthquake drove hotel rates downward. The earthquake also had a knock-on effect in other parts of the region as fewer Japanese executives and tourists travelled abroad. Japanese destinations were forced to discount following the earthquake in March, for example Sapporo was down 11% to HKD 769 and Kyoto down 5% to HKD 1,143. However, the average room rate in Tokyo remained unchanged at HKD 1,115.

Also, popular Thai destinations did not fare as well because of the extensive flooding that spread throughout the country’s northern and central regions from July 2011 until reaching Bangkok in October 2011.

On the other hand, the average hotel room price in Hong Kong continued to soar by 46% to HKD 1,270.

Europe and Middle East region shows modest signs of recovery


As European leaders grappled with the uncertainty of the Eurozone, the Europe and Middle East region overall only experienced a 2% year-on-year price increase which representing the smallest rise of all regions.

There is no doubt that the economic downturn has caused a change in demand patterns. Yet in the leisure market, many customers increasingly trade off a reduced number of nights for a higher quality hotel room. European consumers are prepared to compromise on the number of annual trips but not on the quality of those trips so overall hotel pricing is holding up well.

Business travel trends also feed significantly into the averages across Europe. The market for business meetings and conferences has declined somewhat in response to the economic slump but the situation turn into a positive for deal-seeking leisure travellers as hoteliers in those typically 4- and 5-star properties have sought to maintain their occupancy levels via some great deals.

David Roche said: “With hotel prices overall still below their 2005 level, now is a great time to go out and explore the world. The Hotel Price Index indicates where the prices are going up or down, who has the lowest prices overall, where the best value five-star hotels can be found, so that travel budgets can be stretched for a maximum return.”




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