The average price for hotel rooms across the world fell over the summer, according to the Hotels.com Hotel Price Index. This is the first year-on-year fall in prices measured in any quarter since the Hotels.com Hotel Price Index started in January 2004. The average price paid by travellers for a room during the period July-September…
Global hotel prices fall 3% in Q3 2008
The average price for hotel rooms across the world fell over the summer, according to the Hotels.com Hotel Price Index.
This is the first year-on-year fall in prices measured in any quarter since the Hotels.com Hotel Price Index started in January 2004.
The average price paid by travellers for a room during the period July-September 2008 fell by 3% globally, when compared to the same period in 2007.
However, the weakness of the Pound over the course of Q3 2008 meant that UK travellers have yet to feel the effect of the global fall in hotel costs.
In fact, a combination of slight real price rises in Europe (which bucked the global trend) and the stronger Euro meant that, for UK travellers, average prices in some European destinations have risen by as much as 30%.
The 3% drop in prices globally was driven by falls in room prices across North America (where prices fell by 5%), Latin America (where prices were down 1%) and the Caribbean (prices down 4%).
Prices in Asia, meanwhile, were flat. In Europe, prices were up by 2% as hoteliers defied the general trend, maintaining prices during the summer months.
David Roche, president, Hotels.com Worldwide, commented: “Hotels in the Americas in particular have been feeling the effects of the wider global downturn for the past six to nine months and we have seen extensive price-cutting already. US hoteliers may have to cut prices further to maintain occupancy in the months to come.
“In Europe, by contrast, hoteliers have had to cut less, with a reasonably strong summer performance – the traditional European travel peak – helping them to maintain their rates.
“However, European prices are now starting to come down and there are likely to be an increasing number of good deals to be found across the continent’s major travel destinations over the course of 2009.”
The weakness of the pound in the past quarter (Q3 2008) has meant that UK travellers have actually seen the prices they pay for hotel rooms in Eurozone and US destinations rise substantially, even if prices in the local currency have fallen.
Prices in Dublin, down 10% in Euros, were up by 2% for customers paying in Sterling. In Rome and Barcelona prices were down 11% and 7% respectively in Euros while for UK travellers they were up 2% and 7% respectively.
In some cities – including Geneva, Cologne, Monte Carlo, Gothenburg and Zurich – UK travellers spent over a quarter more in Q3 2008 for rooms than they did in Q3 2007.
Top ten average prices paid for major global cities by UK travellers (city, average price per room per night in Q3 2008, % change year-on-year)
Moscow – £207 (+8%)
New York – £188 (+11%)
Monte Carlo – £176 (+31%)
Venice – £139 – (+2%)
Geneva – £136 – (+32%)
While UK travellers missed out on many of the benefits of falling hotel prices in Q3 2008 there were still some destinations where prices fell for them too despite the weak Pound.
Domestic destinations became cheaper for UK travellers with London recording a 3% fall in prices and slipping from first place on the most expensive European city list to fourth.
Similarly in Edinburgh, prices fell by 5% in Q3 2008 compared to the same period the year before. Prices also fell in Birmingham by 13%, Inverness by 15%, Aberdeen by 11% and Belfast by 8%.
Elsewhere in Europe, UK travellers enjoyed price falls in Helsinki (down 2%), Marseille (down 8%) and Reykjavik (down 7%).
In the US, UK travellers found good value in both Las Vegas and Chicago where prices fell by an impressive 20% in the former and a more modest 3% in Chicago.
Long haul destinations to offer price falls to UK travellers included Shanghai (down 3%) and Rio de Janeiro (down 12%).
Roche concluded: “Hotel prices are set to continue to fall across the world for the coming months.
“Clearly for UK travellers, the relative strength of the Pound against the Euro and US dollar will have an impact on how far their spending money goes on holiday in the coming months, but if they shop around, or consider a break closer to home, they will also benefit from falling prices.”
The Hotels.com HPI tracks the real prices paid per hotel room in Q3 2008, compared to Q3 2007 and is considered by some to be the most comprehensive and accurate source of global hotel pricing information.
It is based on prices actually paid by customers for 68,000 hotels across 12,500 locations around the world, rather than simply advertised rates.
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