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WORLD> Global General
Survey shows hotel prices have sunk
(Agencies)
Updated: 2009-09-16 17:48

SINGAPORE: Don't put off those plans to travel around the world much longer - a new survey shows hotel prices are at their lowest in over five years, thanks, in part, to the economic downturn.

Survey shows hotel prices have sunk
Passengers queue in check-in counters in the new T-1 terminal at Barcelona's El Prat airport September 9, 2009. [Agencies] Survey shows hotel prices have sunk

The latest Hotel Price Index (HPI), by hotel booking website Hotels.com (www.hotels.com), found average room prices across the globe fell 17 percent in the six months to June compared to the same 2008 period, and to the same levels as 2003, as the economic crisis kept away guests.

A large number of hotels also opened shortly before the financial doldrums, further dampening prices, said Nigel Pocklington, vice president of marketing for Hotels.com.

"It's a fantastic time for travellers," Pocklington told Reuters. "Hotel prices have pretty much collapsed, they're down to the same levels as 2003. Exchange rate fluctuations have helped make a lot of destinations much cheaper."

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"Demand for travel, especially business travel, has been hard hit by the economic crisis, and at the same time there's a lot of hotel rooms on supply. This falling demand and rising supply can only mean one thing - price cutting."

The Hotels.com HPI tracks real prices paid per hotel room rather than advertised rates. It is based on prices actually paid by customers at 78,000 hotels across 13,000 locations, and the latest index covered the period from January to June 2009.

Latin American hotels saw the steepest price fall year-on-year of 18 percent, as the H1N1 flu outbreak hit tourism hard, while North American hoteliers cut prices by 17 percent. The average price for a hotel room in a European hotel was 16 percent lower than a year before, the survey showed.

In Asia, where hotel prices had been holding up better than those in other regions, the decline in business travellers sent prices falling 17 percent. Only hotels in the Caribbean appeared immune, reducing rates by just 1-2 percent.

"Not since 2001, in the aftermath of 9/11, has there been such a collapse - surely the word is justified - in global hotel prices," David Roche, hotels.com president, said in a statement.

The Italian island of Capri was able to get away with charging the world's highest hotel rates during the six-month period - $279 a night, up 12 percent compared to last year.

Moscow saw the steepest fall in prices - more than 50 percent - followed by Mumbai.

But with the exception of Capri, the rest of the world's 10 most expensive destinations saw dramatic falls in prices paid by travellers compared to the same year-ago period.

As for the rest of the year, Pocklington said it would all depend on how quickly the economy would, or would not, recover.

"We're unlikely to see declines of this rate in the future, so it may well be stabilizing by the end of the year," he said. "But, with prices closely tied to the level of economic activity, who knows?"

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