Mediaboss Marketing

13 March 2012

London, March 13th 2012 The relative strength of the global hotel sector can be seen as an indicator of a potential turnaround in the economic outlook with the average price of a room around the world rising 4% in 2011, according to the latest Hotels.com Hotel Price Index (HPI). The continuing strength in corporate travel, in particular, helped to push up demand and room rates, although prices were still generally lower than in 2005.

The HPI looks at prices that people actually paid for their hotel room around the world. Last year, prices fell 2% in Asia year-on-year but rose in all other areas: 8% in the Pacific, 5% in North America, 4% in Latin America, 3% in the Caribbean and 2% in Europe and the Middle East. The overall increase reflected a continuing trend of steady recovery after a 13% tumble in 2009.

David Roche, President of Hotels.com: "The hotel sector is a good barometer for the global economy as a whole. Prices are up because demand for rooms is on the rise a sign of higher levels of business and consumer spending. Local conditions, influenced last year by political uprisings, natural disasters and currency fluctuations, do have a major impact on prices but, overall, the momentum is there and the market is growing."

Natural and political events leave their mark

The Arab Spring protests and war in Libya hit prices across the Middle East and North Africa with rates falling in Egypt, Tunisia and Qatar. Travellers to Sharm El Sheikh, in particular, could find prices up to 30% lower than 2010. On the other hand, holidaymakers switching their holiday plans to southern European destinations in Italy and Spain saw substantial price hikes in some popular sunshine sunspots, such as Ibiza where prices rose up to 40%.

Asia was the only region to experience a price fall in average rates, down 2% on average, partly due to devastating natural catastrophes in two popular destination markets. The Japanese earthquake in March 2011 led to falling demand and room rates while Thailand's worst flooding in almost 60 years also triggered a cut in traveller numbers from July onwards and discounting by hoteliers.

The floods in Brisbane and earthquake in New Zealand's South Island, impacting Christchurch in particular, prompted price rises due to a lack of supply of rooms.

Regional variations highlight local conditions

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Global Hotel Recovery In 2011 Signals Growing Market Confidence | hotels.com Reports