From
Hogg Robinson Group
1
6 August 2009
HRG UNVEILS 2009 SIX MONTH HOTEL SURVEY
Part 1: OverviewThe international hotel market is still feeling the effects of the tough economic climateaccording to the bi-annual hotel survey conducted by Hogg Robinson Group (HRG), theinternational corporate travel services company. Most regions are experiencing a decline inhotel room rates in local currency terms, with Abu Dhabi the only exception, recordingaverage room rate growth of 5% in local currency. With occupancy levels continuing to falland rates reduced, corporates continue to consolidate their travel policies and negotiatemore favourable corporate deals.
Trends noted by HRG include:
Moscow once again tops the chart as the most expensive destination for corporatetravellers. However, for the first time since the city entered the HRG hotel survey in 2005,the rate saw a year on year decline (-14%)
Abu Dhabi is now in second place and is the only city in the survey to have achievedaverage rate growth of 5% in real terms when measured in local currency
London has seen a 4% decline in average rate in the first six months of 2009, down fromthe 3% growth over the same period last year. As a result the city has once again failed tomake the top 10, dropping from 16
th
to 23
rd
place
Average rates increased in the Americas by 15% and rose marginally in Western Europethanks to the strength of the US Dollar and Euro against the pound. However, whenexchange rates are factored in, both regions recorded substantial average rate falls
The top end of the market is holding up well, with the highest average rate increase seen in5 star hotels (7.7%)
From
Hogg Robinson Group
2
Margaret Bowler, Director of Global Hotel Relations at HRG, says: “The shift in business practiceshas been substantial and those that adapt well can reap benefits from the unusual tradingenvironment. Hotels are adopting sensible pricing in order to maintain current occupancy levels.Our clients still want to travel and we are helping them find the best and most effective ways to cutcosts, identifying alternative travel options to help manage and reduce corporate travel budgets”.The results show that corporates are travelling smarter as they look to control travel costs andmaximise their return on travel expenditure. HRG has witnessed corporates continually reviewingand consolidating their programmes to secure lower hotel rates by delivering increased revenues totheir preferred suppliers.In addition to lower pricing, corporates have been able to negotiate added-value items within theirrates such as food and beverage discounts, free Wi-Fi access and reduced parking charges.Significantly, last room availability (LRA) is now considered by many as standard, having only beenavailable at a premium prior to the slowdown in the market. However, as hotels are still managing toachieve high occupancy levels in certain cities and at peak times of the year, HRG continues toadvise clients to renegotiate favourable deals on a regular basis, ensuring adequate allocation inhigh volume locations.In some countries in the Middle East, demand continues to outstrip supply in many cities and themajority of investment at the top end of the market is supporting continued rate increases.HRG’s interim survey is based on a combination of industry intelligence, actual room nights bookedand rates paid by its UK clients during January to June 2009 compared to the same period in 2008.The GBP exchange rate is based on the average for the period 1 January to 30 June 2009 versusthe average during the same period in 2008 (data sourcewww.oanda.com)
From
Hogg Robinson Group
3
Part 2: In depth analysisTop 10 most expensive cities worldwide: 2008 v 2009
City2009 AverageRoom RateGBP2009 AverageRoom RateLocal Currency2008 AverageRoom RateGBP2008 AverageRoom RateLocal CurrencyVarianceIn LocalCurrencyVarianceIn GBP2008Ranking InLocalCurrencyMoscow£268.11 RUB 13,263 £312.92 RUB 14,796 -10% -14% 1Abu Dhabi£253.36 AED 1,390.22 £183.33 AED 1,330.32 5% 38% 7Paris£203.46 € 227.55 £199.50 € 257.73 -12% 2% 3New York City£200.21 $299.01 £197.99 $391.07 -24% 1% 5Milan£191.28 EUR 213.93 £196.00 EUR 253.20 -16% -2% 4Geneva£188.74 CHF 317.85 £183.13 CHF 379.91 -16% 3% 6Hong Kong£183.15 HKD 2,120.67 £167.63 HKD 2,581.81 -18% 9% 13Dubai£182.84 AED 1,003.23 £180.95 AED 1,313.05 -24% 1% 8Copenhagen£181.70 DKK 1,514.40 £173.77 DKK 1,673.99 -10% 5% 11Rome£179.49 EUR 200.74 £179.01 EUR 231.25 -13% 0% 12
Key European cities have continued to dominate the top 10, but once again Moscow has witnessedthe highest average room rate despite an average rate fall when measured in both local currencyand GBP. This can largely be attributed to a fall in demand from within the banking and financesectors, combined with an increase in supply from new openings in recent years.Moscow may soon lose its title to Abu Dhabi, which entered the top 10 most expensive cities for thefirst time in the 2008 six month survey. Neighbouring Dubai has continued to suffer from a fall indemand from the banking and finance sector, coupled with an exodus of expatriate and migrant
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HRG 2009 Interim Hotel Survey 060809
Informe sobre la evolución de los valores de los hoteles en grandes ciudades en el primer semestre de 2009.
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