Issues & Trends – September 2010

Sydney, Cairns hotel rates rise as prices stabilise globally

GLOBAL hotel prices rose for the first time since 2007 in the second quarter of 2010, according to the latest Hotel Price Index (HPI). But in the first six months of the year, only six major cities globally showed hotel price increases, according to the index.

Two Australian cities, Sydney (up four per cent) and Cairns (up eight per cent), figured among those six cities. Apart from Sydney and Cairns, “overall, average room prices for hotels in the major Australian cities decreased between 2009 and 2010 by an average of two per cent”, HPI reported.

“Gold Coast hotel prices fell the most – by eight per cent – making it the least expensive Australian city for hotel accommodation at an average of $123 per night per room.

“Melbourne and Perth hotel room rates both fell three per cent in the same period. Sydney’s price rise meant that Perth lost its title as Australia’s most expensive city for hotel accommodation.”

Now in its seventh year, HPI is a regular survey of hotel prices in major destinations across the world carried out by Hotels.com. It tracks the real prices paid per room per night by Hotels.com customers in a sample set of approximately 91,500 properties in more than 15,750 locations around the world, using a weighted average based on the number of rooms sold in each of the markets that Hotels.com operates in.

The latest survey, for the three months to June 2010, shows the average price of a hotel room around the world rose two per cent compared to the same period last year.

“However, prices had fallen so low during 2009 that despite the modest increase, the average price of a hotel room was still lower than it was in 2004,” HPI reported.

Meanwhile the surging Australian dollar has helped ensure that, with a few isolated exceptions, worldwide hotel prices dropped markedly for Australian travellers during the second quarter of 2010 compared to last year.

“They have received excellent value for their international travel. Notable mentions include: Abu Dhabi (-38 per cent); Athens (-22 per cent); Beijing (-20 per cent); Chicago (-20 per cent); Dublin (-16 per cent) and Los Angeles (-16 per cent),” HPI commented.

The index showed the Asia Pacific region as the most buoyant region for hotel prices, with rates climbing in large business and convention hubs like Singapore and Hong Kong on the back of returning corporate travel demand.

“Despite hotel prices staying flat year-on-year, the average price of a hotel room in Asia was 17 per cent higher in the second quarter of 2010 than when the HPI was started in 2004,” the index reported.
“This is in contrast to every other region of the world, where the average hotel room price has remained very close to the 2004 level.”

Hotels.com president worldwide, David Roche, said: “Stabilisation has indeed been under way in the hotel industry, and there are hints of a recovery.

“While the HPI has shown a rise of two per cent, consumers should remember that hotel affordability
across the world has not been this good since 2004, offering terrific opportunities to extend stays or trade up.”