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, 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, 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 database.

Cost of travel soaring but savings possible

Determining the true cost of travel takes some effort. What we pay for airfare, hotels, and meals away from home are elements of a budget we want to pin down as much as possible, but that is not always easy. Experts know the cost of travel is rising, but also offer explanations and suggestions on what we can do about it.

Paying attention to prices at the pump, we need not hear from an expert to know that jet fuel prices are probably increasing as well.

“You’ll see gradual increases and then a much bigger jump in April and May when people start shopping for the summer travel season,” says Rick Seaney, CEO of travel website

Still, there are ways to save on airline tickets, cruise fares, hotels and more. One trick, normally seen as risky business, is to book later rather than earlier.

“For those of you who are flexible with your travel, it can pay to wait until the last minute,” Steven Fischer, vice president of cruise development at Travel Holdings, Inc. told MarketWatch. “That’s when airlines and cruises need to unload inventory, so stay on top of deals through last minute booking sites like and Get a great deal and you don’t have to book 6 months in advance.”Playing it smart when checking into a hotel can help, too. TravelSavingsNut, a website dedicated to providing money saving advice, offers tips and ideas on how to save money when traveling.

“Even if you have a reservation, you may want to consider, before disclosing your reservation to the desk clerk, asking what rooms they have available and the price,” says TravelSavingsNut on its website. “If plenty of rooms are available, you may be quoted a rate lower than your reservation rate for the same type of room. If so, mention to the clerk that the rate is lower and ask that they honor the lower rate. They should be more than willing to do this.

On the road, eating is a different matter, but USA Today Travel has some ideas to help here, too. Travel expert Pele Omori is a freelance writer specializing in travel and culinary subjects. She has traveled and lived internationally since she was age three and though she likes the idea of cooking when we can, Omori has some other suggestions:

“Stay at a place with a complimentary breakfast; otherwise, eat breakfast at a local bakery. Eating baked goods from local bakeries often costs less than eating at a restaurant or a hotel. Ask locals, such as the hotel staff, about bakeries in the area.

If you are looking to sample the local cuisine, eat lunch at a restaurant instead of dinner. Lunch at most restaurants costs considerably less than dinner at the same eatery. Cut costs further by sharing an entree or having a light meal that consists of soup, salad, or an appetizer.”

We may not be able to do much about the prices charged by airlines, hotels, and restaurants, but taking a step back to consider alternative ways of looking at travel expenses can often make an out of control budget more manageable.

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.

Hotel Economics: Hotels plan growth as global economy recovers

Is the hotel industry ready for a rebound? Based on the recent news of expansions and new properties from global hotel groups, it seems the hospitality industry is poised for a pristine few years.

InterContinental Hotel Group is continuing on its quest to keep the title of ‘world’s largest hotel operator’, recently announcing a global expansion that would increase the amount of its hotel rooms around the world by nearly one-third in the next three to four years. InterContinental, which owns various hotel brands including Crowne Plaza, Hotel Indigo, Holiday Inn, Holiday Inn Express, Staybridge and Candlewood Suites, currently operates more than 4,400 hotels and has 1,400 more in the pipeline, the majority of which will open in Europe.

The hotel group’s expansion means more hotels, but also more jobs. More than 100,000 jobs worldwide will be created in the InterContinental family. In the UK, where InterContinental plans to set up at least 36 new hotels, the hotel will hire an additional 3,500 employees to service the new properties, according to a statement from the hotel company in The Scotsman. In addition, the paper reports the InterContinental is putting plans in place for Scotland’s first five-star InterContinental-branded hotel.

InterContinental’s expansion isn’t the first we’ve heard about. JW Marriott announced plans to build 40 hotels in India by 2013; Kimpton and Hyatt are opening various hotels throughout the U.S. and earlier this year, Ritz-Carlton President Simon Cooper gave us some insight into new hotels emerging in Asia and the Middle East. But the question remains: can the hotels sell the rooms? According to a recent study of hotel room prices in Europe from trivago, more rooms are already selling for increased rates, which means more travelers are loosening their purse strings.The study shows the average price of hotels in Europe has increased 12 percent from March to April 2010, the highest point since October 2009.

What’s this mean for hotels?
The travel industry stays afloat due to basic supply-and-demand principles. Based on these numbers, the demand for hotel rooms has risen causing hotel operators to raise their rates – a good sign for a rebounding economy.

Trivago reports that most European cities have experienced price growths of 10 to 20 percent, and in popular tourist destination cities such as Rome, Barcelona and Istanbul, prices rose by as much as 42 percent. Additionally, occupancy in the three- and four-star hotels – which make up the majority of the properties in the InterContinental Hotel Group – rose 2.7 percent in Scotland, against increases of 3.8 percent in regional UK, 3.7 percent in England and 9 percent in Wales.

If the numbers continue to increase across the pond, the InterContinental and other hotel groups could be right on target with their global expansions.

Travelocity announces the launch of Top Secret Hotels

The roaming Gnome has found a new way to book hotels: Travelocity announced it will offer unpublished – or ‘opaque’ – hotel deals as part of their hotel offerings.

The concept is familiar: Find deeply discounted hotel rates based on preferred location, star-rating and amenities, but you won’t know the name of the hotel until you book. Here’s the twist: there’s no bidding, and you can see both the available hotels by name and the opaque hotels in one window.

The Top Secret Hotels tab above the general hotel listings will show users unpublished rates at participating hotels, if available. As of now, these opaque hotels include major U.S. cities, and popular cities in Canada (Montreal, Toronto, Mississauga), Mexico (Cancun, Cozumel, Puerto Vallarta, Riveria Maya, San Jose Cabo), the Caribbean (Dominican Republic, Jamaica) and South America (Buenos Aires, San Jose, Sao Paolo).

Unlike Priceline and Hotwire, where users bid on a specific hotel, Travelocity’s opaque hotels are a set price but in some cases up to 45% off the regularly published hotel room rate. Choose the opaque option and you’ll be able to filter based on the hotel’s star rating and general location, and hotel amenities and user ratings, but you won’t know the name of the hotel until you book.

Of the big four OTA’s – Expedia, Travelocity, Orbitz and Priceline – Travelocity is the first to offer one search that pulls up general hotel results and opaque results in the same window. Why the change? It’s a new way to put the power of purchase in the consumers hands. I took the new site for a spin and here’s what I found:

My search included 3- to 5-star hotels in Boston for this weekend, March 27-28, between $50 and $200 night.

Travelocity returned six hotels – three in the downtown Boston area; three in neighboring suburbs. I choose the 4-star hotel located in Boston’s downtown/waterfront district, with a pool and free Internet access, a user rating of 4/5 and a lowest price per night of $105. My total came to $121.39 (nightly room rate plus taxes).On the next pages I can confirm the room, location and rate, and after putting in a credit card and securing the transaction, you’ll find out the name of the hotel.

As a comparison, I used the same specifications on Priceline and was returned one hotel that matched my needs for $189/night. Travelocity wouldn’t divulge the hotels they’re working with, but Lesley Harris, Vice President of Hotels at Travelocity, told me:

“Travelocity is responding to the needs of our customers, as well as our hotel partners. In today’s economy customers are searching for deals and hotels are looking for a way to drive bookings – Top Secret Hotels is able to accomplish both. We also know that a number of people who currently shop on our site end up going elsewhere simply to buy an opaque product, we now can save customers the hassle of going between sites by providing every type of shopper with what they need all in one place.”

The Travelocity star ratings are based on research from the Travelocity team which may include on-site inspections, post-trip customer feedback, and quality of amenities and staff, in accordance with industry standards. Travelocity sent me a copy of their rating system descriptions and it’s pretty standard:

5-star: Luxury properties that exhibit an exceptionally high degree of service and hospitality.
4-star: Superior properties with a high level of service and hospitality, as well as a wide variety of amenities and upscale facilities.
3-star: A high level of service with additional amenities, features, and facilities.
2-star: These properties meet a traveler’s basic needs for comfort and convenience while offering moderate aesthetic enhancements in the property grounds, room decor, and quality of furnishings.
1-star:These properties meet a budget-traveler’s basic needs for comfort and convenience. They tend to be located near major attractions or thoroughfares and provide clean guest rooms.

Overall, an interesting concept from Travelocity. As someone who books hotels frequently, it’s nice to have the option to choose from the exact hotel property, or just press your luck with the hotel price without having to bid. Just remember: Top Secret Hotel reservations are non-changeable, non-refundable and non-transferable. Your credit card will be charged in full at the time of booking. If you’re headed to a new city or destination, I highly recommend you book with a hotel you know, or a brand you’re comfortable with. For those frequent visitors to a repeat destination, it’s worth pressing your luck for a discounted rate.