Tracking Global Hotel Prices
However, the rise in hotel prices is not uniform worldwide. Latin America registered the biggest increase, at 7%. North America and the Caribbean also outperformed the global average, with increases of 3% and 5%, respectively, no doubt helped by the strengthening US economy. In Australia, the slump in the mineral resources industry led to a drop in business travelers, particularly in Western Australia; as a result, the country posted hotel price growth of only 1%. Since the Eurozone is only beginning to climb out of recession, hotel prices in Europe and the Middle East remained sluggish, also recording a 1% gain. In contrast, South African hotel prices fell by 9%. According to David Roche, president of Hotels.com, European hotel prices suffered the most in the wake of the economic fallout in 2008/2009; he expressed surprise that any growth in European hotel prices occurred in the first two quarters of 2013. Asia is the only region where hotel prices have gone down—by 2%—in the first half of 2013. Individual Asian cities performed well but the depreciation in value of the Yen and the Rupee, together with a fall in the number of inbound visitors to China, resulted in a net decline. However, outbound travel from China has not yet been impacted by slowdown in the country’s economy. The rapidly growing number of Chinese international travelers is the next big trend in the tourist industry, says David Roche. According to the China Tourism Academy 2013 report and the UN World Tourism Organization, China has officially become the world’s largest outbound tourism market—besting Germany and the USA—with an estimated 83 million overseas trips made by Chinese citizens. In 2012, Chinese international tourists spent US$102 billion, a 40% increase since the previous year.
The breakdown of the results by country and by city is also instructive. Although hotel prices in the Middle East as a whole have registered only modest growth, four out of the top-10 countries with the most expensive hotels are located in this world region. Oman ranked first: an average traveler in the sultanate paid £186 (approximately US$300) for a night in a hotel, a 7% increase from the previous year. Saudi Arabia placed fourth with a 20% increase to £150 (approx. $240). Israel, its political and security issues notwithstanding, ranked 7th, with an average hotel price of £142 (approx. $225). (The rise in hotel prices, coupled with the drop in purchasing power lowered Israel’s ranking in the World Economic Forum’s Travel & Tourism Competitiveness Report to 53rd place.) The final Middle Eastern country to make it into the top-10 list of most expensive hotels is United Arab Emirates, with £138 (approx. $220). Other countries in the top-10 list are Monaco (£184), Mauritius (£171), Russia and Brazil (both £147), Singapore (£142), and Switzerland (£141).
When it comes to individual cities, Monte Carlo (Monaco) held onto the overall top slot ahead of runner-up Muscat (Oman), despite having experienced a 10% fall. The list of the top-10 cities with the most expensive hotels also includes Rio de Janeiro, Key West, New York, Moscow, Cannes, Geneva, Miami, Boston. Among the next fifteen cities down the list are some expected candidates and some surprising ones: Cancun, Dubai, Singapore, San Francisco, Perth, Zurich, Sydney, Dubrovnik, Los Angeles, Seattle, Washington DC, Jerusalem, Venice, Paris, and Langkawi (Malaysia).
Overall, the Middle East has experienced pronounced volatility in hotel prices over the past year. Some countries showed a significant increase as a measure of stability returned. Prices in Tunisia climbed 22% and Morocco registered a 12% gain. Marrakech in particular experienced a significant growth in hotel prices, 24%, due mostly to the increased optimism about local tourism. Even Egypt saw its hotel prices rise by 25%, with those at its prime Red Sea resort of Sharm el Sheikh, growing 30% in 2013, while those in Cairo grew by 16%. Considering Egypt’s current turmoil, however, hotel prices could again drop. The most popular destination in the United Arab Emirates, Dubai, saw high occupancy and new upscale hotels drive its rates up 6%. In a global first, a new giant airport concourse has been opened in the Emirate exclusively for the Airbus A380 super-jumbos. As a result of other expansion plans, for the facility is expected to become the world’s busiest airport by 2015. Conversely, hotel rates in Abu Dhabi dropped 3% and in Doha by 2%. Jordan experiences a more significant drop of 6%.
In Latin America, Mexico was the star performer, with the average hotel price rising by 20% to £123. However, the next fastest risers, Costa Rica and Colombia, registered only a 7% increase to £99 and a 5% increase to £104, respectively. Brazil, though it has the highest average hotel price of all countries in the region, showed a decrease by 6%. It was not the biggest loser, however, as Argentina fell 10% to £81 and Chile dropped 9% to £97.
In Asia, the largest drop was recorded in Indonesia, down 14% to £92, followed by South Korea, down 10% to £97. A 6% drop took India to £81, while Japan fell by 5% to £92. Cambodia’s hotel price also dropped by 5%, taking it to £45, the lowest in the world. In other Asian countries, hotel prices rose: in both Taiwan and the Philippines by 4%, and in China and Thailand by 2%. Yet hotel prices in many major Asian cities fell over this period. Hanoi was down 13%. Seoul and Mumbai both took a 9% drop, while Kyoto lost 7% as the Yen fell in value. In Hong Kong, where hotel prices have been increasing steadily for a number of years, the average price paid decreased by 4%; despite an increase in tourist arrivals, new hotel openings increased supply. Tokyo and Delhi both exhibited a 2% slip. On the other hand, three Asian cities—Taipei, Kuala Lumpur, and Beijing—recorded 6% gains to £76. Singapore grew 4% to £142. Amongst the most popular Thai holiday favorites, Pattaya and Koh Samui had the highest increases in the region, of 10% and 7%, respectively. Krabi and Phuket both added 2%, while Bangkok’s hotel prices rose merely 1%. The same small drop in hotel prices in Phnom Penh made it the world’s cheapest destination. In contrast, Chiang Mai hotel prices tumbled 15%, to £44.
In the USA and Canada, increased hotel prices were recorded, with travelers paying an average of £118 and £108, respectively. The steepest rises were recorded in Florida: in Miami and Key West hotel prices went up by 13% and in Fort Lauderdale by 8%. In contrast, Orlando, home of Disney World, saw a drop of 7% to £72. On the west coast, Seattle gained 12%, San Francisco added 9%, whereas Los Angeles and San Diego gained 8% each. The major northeast cities had varying results. New York is traditionally the most expensive US destination, but in spite of a 4% rise in the NYC hotel prices, it was overtaken by Key West, albeit by just £1 a night. The Big Apple now ranks as the word’s 5th most expensive city when it comes to hotels. Washington DC was up by 4% while Boston fell by 2%.
In Europe, the largest fall in hotel prices, 18%, was recorded in the Ukraine, where a hotel room averaged £99 as rates adjusted following the holding of the UEFA European Football Championship there in the summer of 2012. In joint-host Poland, prices fell 8% to an average £61. Although Monaco has the most expensive hotels of any European country (and second most expensive worldwide), it experienced a drop of 9%. Luxembourg recorded a 7% fall to £92 and the Netherlands was down 4% to £99. There were 3% slips in Slovenia and Austria; in both countries an average hotel room costs £90. Several other European countries, however, exhibited the opposite trend: hotel prices in Lithuania climbed 13% and in Norway 12%. The Czech Republic recorded a strong performance, up 10% to £78. Malta is up 9% to £90. In the UK, travelers paid £86, 3% more than the previous year. Several of the European countries that had been most affected by the economic crisis seemed to have turned the corner: hotel prices in Iceland grew by 13%, Ireland rose by 6%, Portugal added 5%, and Spain grew 2%. But not all such countries are showing promising results: the average hotel price in Greece and Cyprus are now the same, £89 although they did not change in Greece but fell in Cyprus by 9%.
As for individual European cities, continued recovery in prices occurred in several of places that had been most affected by the economic downturn: Reykjavik grew 15%, Dublin added 8%, and Lisbon was up 4%. The picture was mixed in Spain, with Benidorm and Marbella climbing 14% each, while Palma de Mallorca and Ibiza both added 4%, due to high demand in the Balearic Islands over this period. However, Alicante was flat on £65, Barcelona dipped 1% to £104 and Madrid fell 3% to £81, suffering from a lack of demand from the domestic and Italian markets. In Italy, Venice was down 7% to £128, Milan down 2% to £107, and Rome flat at £108. In Germany, hotel prices in Frankfurt rose by 11%, in Berlin by 6%, and in Munich by 4%. Among the cities that experienced the highest rises in hotel prices is Cannes, home of the renowned film festival: its hotel prices are up 11% to £162. Two important Eastern European destinations, Prague and Dubrovnik, saw prices rise by 10% . But Prague, with an average hotel price of £78, remains one of the best values in Europe, alongside the two Baltic capitals, Vilnius and Riga, where an average hotel room costs £63 and £60, respectively. An average hotel room in my home city, St. Petersburg, cost £116, the same as in London, Fort Lauderdale, or Johannesburg—and quite a bargain compared to the £164 price tag in Moscow.
Another set of data concerns hotel room prices by “star ranking”. The price of a room in a five-star hotel is most expensive in Geneva, with an average of £375, followed by New York with £335 and Paris with £299. In contrast, a five-star hotel room in Warsaw can be purchased for under £100. The same amount of money would get only a four-star hotel room in Bangkok, Berlin, or Cape Town, a three-star room in Barcelona, Delhi, or Melbourne, a two-star room in Montreal, Singapore, or Zurich, and merely a one-star room in Geneva or New York.
The Hotel.com report includes several additional top-10 lists. Visitors interested in city beaches found the best hotel deals in Lisbon, where the average tag was merely £79, less than half of that in Rio de Janeiro. Tourists who pick their destinations by song titles may be attracted to Memphis and Las Vegas, which offer a hotel room for £76 and £83, respectively, less than half of the price to be paid in New York. Memphis is also a great option for those who like to visit celebrity cemeteries, along with Buenos Aires and Stratford-upon-Avon. Christmas destinations that can be visited on the cheap include Budapest, Prague, or Dublin. The best party destinations that would not break the bank are supposedly Ayia Napa (Cyprus), Berlin, and Dublin, all of which offer hotel rooms for less than £80. An average accommodation in the two gambling capitals of the United States—Las Vegas and Atlantic City—costs £83, a great deal compared to £122 in Marbella (Spain) or £180 in Rio de Janeiro (alas, there is no information on Macao in the Index report). For football (soccer) fans, travel to Dortmund, Glasgow, or Manchester is a good deal, with average prices of £80 per room per night. Foodies may spend a lot of money at a 3-star Michelin restaurant, but would find the largest number of such establishments and the cheapest hotel rooms, under £100, in Osaka, Kyoto, or Bruges. The latter also offer some the best chocolates, mussels, and beer as well. A similar gastronomically-themed trip to a more traditional “food Mecca”, such as Paris or New York, would cost £128 and £178 per room per night. Finally, travelers looking for a romantic getaway should consider Seville (Spain), Koh Samui (Thailand), or Santiago (Chile), where a hotel room would cost under £100, a much better deal than Foz Do Iguacu (Brazil) or Mauritius, where an average accommodation would set you back £147 and £171, respectively.
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