31 January 2013
Global room rates show year on year rise, but weak exchangerates disguise price hikes in Latin America
Hotel room rates in Latin America soared in 2012 as capacity failed to keep pace with demand frominternational business travellers looking to cash in on rapidly emerging economies across the region. The latestannual hotel survey from award-winning international corporate services company
found weak exchange rates continue to shield the majority of international business travellers fromrapidly rising hotel rates in cities like Rio De Janeiro and Buenos Aires.Across the globe, overall rates increased by 1.4%, compared to 1% the previous year. 32 of 55 cities with tophotel rates showed a year on year increase in local currency rate in 2012, compared with just 23 of 55 cities in2011.Key trends include:
For the ninth consecutive year, Moscow hotels remain the most expensive in the world for businesstravellers. The city’s hotel rates increased by 4% over 2012 and remain significantly higher than all othercities.
Rates in global financial centres, including London, New York, Hong Kong and Singapore increased overthe last year as confidence in the financial sector gradually showed signs of improving. Tokyo continued torebound as reconstruction and recovery efforts drew more corporate activity.
Brazil’s major metropolitan cities, Rio de Janeiro and Sao Paulo, showed the highest room rate increases,at 19% and 15% respectively in local currency. Latin America is showing strong growth in business travel,and of the top five cities with the highest rate increases, three were from the region. However, the riseswere largely cancelled out when viewed in GBP.
Indian cities Bangalore, Mumbai and New Delhi have all been impacted by the economic slowdown inIndia. Hyderabad was the exception, with a modest growth during the first half year mainly due toincreased demand driven by the IT industry.
Having seen significant declines in average room rates during 2010 and 2011, rates in Dubai rose 2% andare beginning to return to levels not seen since before the Arab Spring. Elsewhere in the Middle East,cities are experiencing lower rates as business travellers react to ongoing security concerns.
New hotel openings in Lagos have somewhat eased pressure on capacity, but average rates remain someof the highest in the world. Security remains a major concern for business travellers in Africa, especially inLagos where most corporate visitors use five-star hotels.
Europe is showing uneven, patchy room rate variances quarter to quarter. Many cities, such as Barcelonaand Athens, recorded high volatility and unpredictable patterns. Cities in Germany fared better, withFrankfurt and Berlin both reporting higher demand leading to increased room rates.
The US as a whole recorded increased room rates as key cities such as San Francisco and Atlanta hostedstrong convention business. The one exception was Washington, D.C., where rates dropped by 14% ascorporate demand softened.