|August 13, 2012|
HRG Survey: Hotel Rates On The Rise In Latin America, As Fallout of Sovereign Debt Crisis Hits Eurozone
|The strongest growth in hotel rates in the first half of 2012 took place in Latin America, whilst hotel prices across the Eurozone either fell or remained flat, according to the latest bi-annual hotel survey from Hogg Robinson Group (HRG), the award-winning international corporate services company. |
Although the HRG survey reveals a fragmented global picture, the international hotel market appears to be stabilising, showing a 1% variance across the top 50 cities, compared to 4% during the same period in 2011. Twenty-three cities showed a year on year increase in rates, and three have maintained the same rates. This is compared to 33 cities which showed a year on year rate increase in 2011.
Stewart Harvey, Group Commercial Director at HRG, says: "The results of the hotel survey present an intriguing picture of where businesses are channelling travel spend. Macroeconomic weakness and uncertainty are driving room rates down across mainland Europe, but the significant growth in room rates across the Latin American region indicates a shift in business priorities towards high potential destinations.
"Businesses are not necessarily spending less on travel, but they are certainly looking for ways to make existing budgets work harder. As demand drives hotel prices up in emerging regions, we are working with clients to help negotiate the fairest rates, and maximise the returns from travel-related expenditure."
Trends noted by HRG include:
For the 8th year in a row, room rates in Moscow are far and away the highest of any destination monitored by HRG. Hotel prices in the Russian capital have risen 3% in local currency over the past year.
Lagos emerged as the second most expensive destination due to the high volume of inbound business travel connected with the oil industry. Travellers to Lagos are also conscious of the city's well-documented security issues and are more inclined to stay in five-star accommodation.
Mexico City reported the highest increase in room rates at 30% in local currency, as growth in demand, coupled with a lack of new openings, drove an aggressive increase in average achieved rates. Across the wider Latin American region, Rio de Janeiro and Sao Paulo reported rate increases of 15% and 23% respectively.
Room rates in Tokyo recovered by 4% as the region increased following the earthquake and tsunami in 2011. Dubai also saw room rates rise as business travellers returned to the region following the upheaval of the Arab Spring.
Hotel rates in India were driven down by the country's economic slowdown and lack of capital for new investments. Mumbai showed an average room rate decrease of 7% and Bangalore 21% in local currency.
The financial crisis affected average room rates across the Eurozone leading to rate decreases in key European cities, notably Barcelona which saw rates fall by 22% in local currency. Madrid and Dublin also reported 2% and 6% rate decrease respectively.
The UK saw a 2% room rate increase, primarily driven by high rates in London and a select number of regional cities, including Liverpool which saw room rates jump by 8% following increased economic activity in the region.
Key destinations in the USA, including New York, San Francisco all saw average hotel room rates rise in the first half of 2012, as business activity increased in line with economic performance.
Now in its 20th year, HRG's biannual hotel survey looks at hotel room rates for key business destinations across the world to provide a dynamic insight into global business travel behaviours.
Data presented in the 2012 half-year survey is based on a combination of industry intelligence, actual room nights booked and rates paid during January to June 2012 compared to the same period in 2011.