Hotel Prices Up Five Percent Since 2011




The newest data from the Hotel Price Index shows that North America has had the second fastest rise in average hotel prices in the first half of 2012, to the tune of about a five percent increase over what they were in 2011.

The good news, however, is that prices remain ten “index points” behind the 2007 peak and are still, on average, less costly than they were in 2006.

The data, tracked by booking website Hotels.com, shows that prices rose globally about four percent during the first half of the year, the first time in five years that the HPI has increased globally.

“A new leaf for the hotel sector is on the horizon, as illustrated by the fact that 26 out of 30 cities on Americans’ most preferred domestic destinations list had an average daily rate increase in the first half of 2012,” said Victor Owens, vice president and general manager, Hotels.com North America in a release.

West Coast Isn’t Laid Back When It Comes to Prices

The West Coast has accounted for a majority of consistent domestic price increases for the first half of the year, with many popular cities raising prices between five and 13 percent.

San Francisco elevated prices by nearly $20, from $135 in 2011 to $153 in 2012. Monterey also showed a notable increase of 10 percent to $147 in the first half of this year.

San Diego, which displayed a modest average daily rate increase of 6 percent, has steadily been making its way up the list of favorite domestic cities among Americans. This year, it has overtaken Chicago ($158) as the fourth favorite city among U.S. travelers, making it the first California city to break into the top four, joining reigning favorites Las Vegas ($101), New York City ($205) and Orlando ($110), respectively.Americans Spending (And Staying) More

Americans are spending roughly $125 a night on domestic hotel stays, a five percent year-over-year increase. Data also shows an increased number of U.S. bookings seen over the past six months.

In order to stand out in this increasingly competitive sector, hoteliers are revamping and upgrading their properties, or expanding into the luxury segment, which may account for some of the price increases.

Luxury travel trends such as spa tourism and shopping continue to drive bookings in destinations like New York City and Miami, yet Americans remain consistently vigilant about getting the best value for their dollar. All-inclusives, package deals, and add-ons, such as free breakfast, free Wi-Fi, ground transport or show tickets are all key offerings Americans are on the look-out for to make their dollar go further.

How to Snag A Deal

Prices in some all-time favorite Southern European cities such as Athens, Greece (down 11 percent), Toledo, Spain (down 9 percent), and Pisa, Italy (down 8 percent), are all on the down-swing according to prices paid by North American’s in the first half of this year – a likely result of significant drops in local currency.

Surprisingly, the UEFA Euro Cup and the ramp-up to the Summer Games did not create a significant price increase for the region, as Europe and the Middle East as a whole displayed the least amount of growth from a global perspective in the first half of 2012, only increasing by a worldwide average of 1 percent. Warsaw, Poland (up 9 percent), was able to reap some benefits of its Euro Cup tourism, while business and group travel in London (up 1 percent) was affected due to limited inventory and the expected influx of leisure tourism as a result of added attractions for the Summer Games.

The HPI tracks data from 140,000 global hotels in the Hotels.com database.

Moscow hotel rooms most expensive in the world

International travel services firm HRG just released the findings of their 2009/2010 hotel price survey. In it, they recrowned Moscow as the city with the most expensive hotel rooms. The average rate for a room in the Russian capital is a totally insane GBP256, or about $408. The rest of the top ten includes most of the usual suspects, including Washington DC and New York.

In North America, the top five most expensive cities is made up of New York, Washington DC, Houston, Boston and Chicago – so no surprises there either. The price difference between the average room rate in New York and Chicago is just under $100 – showing once again that New York hotel prices really are extremely high. Rooms in the Big Apple are on average more than twice as pricey as in Montreal, which takes the tenth spot in the survey.

For more pretty charts and numbers, head on over to the results page for a three-part overview of all the hotel data collected in the survey.

A snapshot of Hotels.com’s annual price index

How do you know if you’re actually nabbing a great deal? For starters, it helps to know what other people are paying.

Hotels.com has been compiling its Hotel Price Index since 2004. The info is based on average prices actually paid by consumers who book through Hotels.com. These prices also factor in any promotions (4th night free, 30 percent off, etc…). Trend data can be a bit dry, so here are some highlights from the 2009 report that was released today.

Globally, travelers paid 14 percent less for hotel rooms in 2009 than in 2008. The numbers work out to roughly what we were paying back in 2003, according to Nigel Pocklington, Hotels.com’s vice president for global marketing. It’s a classic example of decreasing demand plus too much supply.

Prices listed below are the average nightly rate paid for a room, plus a comparison of 2009 data to 2008 numbers.

Las Vegas:
$85; 18 percent cheaper
New York City: $199; 24 percent cheaper. “It’s unprecedented for a New York City hotel room to go below $200 in recent years,” Pocklington told me by phone.
Dublin: $122; 27 percent cheaper
London: $185; 18 percent cheaper. Pocklington notes that if comparing in British pounds, rooms in London were 7 percent cheaper, but with the currency fluctuation factored in, 2009 inventory was more like 18 percent less than 2008 prices.
Bangkok: $100; 16 percent cheaper
Hong Kong: $125; 20 percent cheaper
Sydney: $131; 18 percent cheaper
Cape Town: $130; 2 percent cheaper
Dubai: $185; 25 percent cheaper

I was surprised to see that a room in Dublin ($122) was roughly on par with Hong Kong’s nightly average of $125. Meanwhile, London and Dubai tied at $185. The question on everyone’s mind is, of course: What about this year?

“2010 will be a year of stabilizing, but it will still be a good year for travelers,” Pocklington said. “Shop around and book early. There will be attractive promotions throughout the year.”

As you evaluate travel deals this year, it won’t hurt to use this price index as a benchmark to see how 2010 is really measuring up.