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Average global room rates rise by 4 per cent in first half of 2012: Hotels.com Hotel Price Index (Part I)

In the first half of 2012, the average price paid for a hotel room, regardless of currency, increased by 4 per cent. Hospitality Biz presents highlights of the Hotels.com Hotel Price Index First Half 2012 report which shows the global and regional Hotel Price Index for the first six months of 2012 compared to the same period in 2011

Thursday, December 13, 2012, 10:45 Hrs  [IST]

The average price of a hotel room around the world rose 4 per cent in the first half of 2012 compared with  the same period of 2011, according to the latest Hotels.com Hotel Price Index, standing at 108  compared to 100 when the Index was launched in 2004.

This remained some way behind its half-year peak of 119 in 2007 and represents great value for travellers, but the recovery is now well-established and prices have risen across the world.

The strong economies of the Pacific basin powered the sharpest rises, North America gained ground and Asia saw prices rebound from the falls of last year, while Europe and Latin America lagged behind.

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Figure 2 HPI quarterly breakdown by region from Q1 2004 to Q2 2012

According to Johan Svanstrom , Vice President , Hotels.com APAC , “Despite continued political and economic uncertainty and currency fluctuations across Europe and  the US, local economic strength throughout the Asia Pacific region resulted in hotel price rises. Rates  in Asia rose modestly while average rates in the Pacific region grew notably.  One of the main drivers of these increases has been the continued expansion of low-cost carriers in  the region. This has resulted in a travel boom, as air travel within the region becomes more  accessible and affordable, and also leads to online booking trends.  With some of the highest occupancy rates in the world, average hotel rates in APAC’s business hubs,  such as Singapore and Hong Kong, continued to climb. India  and China both see rising traveller  numbers, on the back of fast-growing middle classes. It is anticipated room and occupancy rates across the Asia Pacific region will continue to rise as demand from  business and leisure travellers outstrips supply in many key markets. Currency fluctuations and  global economic outlook uncertainties will however provide some volatility and affect inbound  tourism, as observed in for example Australia. However, hotel deals are present all across the region. Travellers will continue to be presented with  good opportunities to snap up discounts, so keeping an eye out online is recommended.  In terms of traveller behaviour, with Asia having the largest number of mobile subscribers in the  world and a growing propensity to travel, we expect a surge in late notice bookings through mobile  devices as travellers become more confident using this channel. ”

Asia bounced back
  • Asian prices recovered well from the falls in the first half of 2011 as confidence returned to  the market following the Japanese earthquake, tsunami and nuclear crisis in March of that  year.
  • The HPI increased 4 per cent to stand at 108, matching the global figure.  This was 18% lower than its high in 2008 but the industry was back on track as travel to and   within the region returned.
  • The success of the international business centres and major cities in Asia helped push prices  up and the number of new routes launched into the market by low cost carriers also boosted  travel.
Price Changes in Global City Destinations
Foreign travel became more expensive for Indian travellers as the Rupee fell in value against many major currencies, particularly in the latter half of the period. Other factors also had an impact. For instance, areas that were facing serious political or natural upheavals in the first six months of 2011 recovered their equilibrium, leading to prices in areas such as the Middle East and Japan, returning to more normal levels.

Indian travellers faced rate rises at home as well as abroad with Mumbai up 7 per cent to INR 7,005, New Delhi up 4 per cent to INR 6,233 and Calcutta up 2 per cent to INR 5,620 INR.  Traditional international business centres saw inflated prices with Kualua Lumpur up 59 per cent to INR 6,594 , the highest percentage rise in the HPI, while Hong Kong was up 27 per cent to INR 8,812 following  strong demand and Singapore rose 9 per cent to INR 9,182.

The fall in the value of the Rupee had a particular impact on travel to the US.  New York retained its position as the most expensive destination in the HPI following strong growth  of 24 per cent to INR 12,936. Other major cities were also included in this trend with the west coast leading  the pack with San Francisco up 27 per cent to INR 9,496 and Los Angeles growing 24 per cent to INR 7,692.

The Europe and Middle East HPI was in the doldrums with only a 1 per cent increase in H1 2012 but this  masked some considerable ups and downs across the region.  Prices in London grew by 12 per cent to INR 11,311, maintaining its position as the highest priced European  destination for Indian travellers in the HPI.

The return to a calmer political situation in much of the Middle East led to some steep price rises in parts of the region. Dubai shook off the gloom and prices there accelerated by 27 per cent to INR 7,628.

Average hotel prices in H1 2012 compared with H1 2011 in INR
Destination
H1 2012
H1 2011
% change
New York
12,936
10,464
24%
London
11,311
10,055
12%
Milan
10,623
8,423
26%
Paris
9,969
9,466
5%
Amsterdam
9,532
9,384
2%
San Francisco
9,496
7,503
27%
Rome
9,217
8,682
6%
Singapore
9,182
8,413
9%
Hong Kong
8,812
6,950
27%
Bali
8,804
9,488
-7%
Frankfurt
7,889
7,557
4%
Los Angeles
7,692
6,205
24%
Istanbul
7,629
6,421
19%
Dubai
7,628
5,991
27%
Vienna
7,603
6,479
17%
MUMBAI
7,005
6,555
7%
Las Vegas
6,649
5,769
15%
Kuala Lumpur
6,594
4,160
59%
NEW DELHI
6,233
5,990
4%
Phuket
5,713
5,225
9%
CALCUTTA
5,620
5,504
2%
CHENNAI
4,867
4,397
11%
Shanghai
4,865
3,864
26%
Orlando
4,601
4,257
8%
Bangkok
4,501
3,814
18%
Pattaya
3,811
3,468
10%


The biggest percentage price rises in H1 2012 compared with H1 2011 in INR

Destination
H1 2012
H1 2011
% change
Kuala Lumpur
6,594
4,160
59%
Dubai
7,628
5,991
27%
Hong Kong
8,812
6,950
27%
San Francisco
9,496
7,503
27%
Milan
10,623
8,423
26%
Shanghai
4,865
3,864
26%
Los Angeles
7,692
6,205
24%
New York
12,936
10,464
24%
Istanbul
7,629
6,421
19%
Bangkok
4,501
3,814
18%
Vienna
7,603
6,479
17%
Las Vegas
6,649
5,769
15%


Best value Asian destinations in INR
Destination
Price
Pattaya
3,811
Bangkok
4,501
Shanghai
4,865
CHENNAI
4,867


Most expensive US destinations in INR
Destination
Price
New York
12,936
San Francisco
9,496
Los Angeles
7,692
Las Vegas
6,649
Orlando
4,601


Top shopping cities around the world in INR
Destination
Price
New York
12,936
London
11,311
Milan
10,623
Paris
9,969
Hong Kong
8,812

Price Changes by Country
In India itself, overall rates rose 12 per cent to INR 4,696 following a surge in demand from domestic  travellers as overseas destinations became more expensive but the country remained the destination with the lowest rates in the HPI.

Switzerland was once again at the top of the table with the highest prices in the HPI in spite of a 1 per cent drop in prices to INR 10,452 as hoteliers cut rates to remain competitive.  In other parts of Asia, Malaysia registered the highest percentage increase in the HPI with a 46 per cent  jump to INR 6,464 as the Malaysian Tourism Ministry continued to target high yield tourists in particular.

Elsewhere, the boom in Australian prices continued with a rise of 13 per cent to INR 8,429 and the US also  had a good start to the year with its rates climbing by the same percentage figure to INR 7,619.

Average hotel prices by country in H1 2012 compared with H1 2011 in INR
Destination
H1 2012
H1 2011
% change
Switzerland
10,452
10,513
-1%
United Kingdom
9,715
8,947
9%
Italy
9,336
9,052
3%
Singapore
9,182
8,413
9%
France
8,898
7,801
14%
Australia
8,429
7,476
13%
Germany
8,427
7,137
18%
Netherlands
8,376
8,933
-6%
Turkey
7,920
6,296
26%
Indonesia
7,736
8,206
-6%
Austria
7,687
6,484
19%
United States of America
7,619
6,758
13%
United Arab Emirates
7,446
5,953
25%
Spain
7,322
7,677
-5%
Belgium
7,259
7,534
-4%
Canada
7,084
7,494
-5%
Malaysia
6,464
4,438
46%


The biggest percentage price rises in H1 2012 compared with H1 2011 in INR
Destination
H1 2012
H1 2011
% change
Malaysia
6,464
4,438
46%
Turkey
7,920
6,296
26%
United Arab Emirates
7,446
5,953
25%
China
5,028
4,051
24%
Austria
7,687
6,484
19%
Germany
8,427
7,137
18%
France
8,898
7,801
14%
Australia
8,429
7,476
13%
United States of America
7,619
6,758
13%
INDIA
4,696
4,202
12%
Thailand
4,801
4,305
12%


The biggest percentage price falls in H1 2012 compared with H1 2011 in INR
Destination
H1 2012
H1 2011
% change
Greece
6,200
8,488
-27%
Indonesia
7,736
8,206
-6%
Netherlands
8,376
8,933
-6%
Canada
7,084
7,494
-5%
Spain
7,322
7,677
-5%
Belgium
7,259
7,534
-4%
Switzerland
10,452
10,513
-1%

 
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