9th December, 2008
Acrobat (pdf, 156 KB)
The Hotel Price Index
Autumn 2008
Introduction
Hotels.com’s Hotel Price Index (HPI)
is a regular survey of hotel prices in major city destinations across the
world. The HPI is based on bookings made on Hotels.com,
the hotels expert and the world’s most visited online hotel booking site.*
- The HPI tracks the real prices paid per room by Hotels.com
customers around the world.
- Approximately 68,000 hotels in over 12,500 locations make up the sample of hotels from which
prices are taken.
- The prices shown are those actually paid by customers (rather than advertised rates), and therefore
give an accurate reflection of hotel prices for the period.
Hotels.com’s international scale (in
terms of both customers and destinations) makes it one of the most comprehensive
benchmarks available, as it incorporates both chain and independent hotels.
In Europe, approximately 25% of hotel rooms are part of a chain, the remainder being independent.
The reverse is true of the US, where approximately 70% of hotel rooms booked are in chains.
In addition to the standard survey, the HPI includes occasional features on new or unusual booking
and pricing trends.
* The Hotels.com website is the most
visited in the ‘Hotels/Accommodation provider’ category, according to comScore
Media Metrix (January-December 2007).
In this issue
In the HPI report, we focus on two main sources of data:
- The first section (chapter 1) shows the global Hotel Price Index for
Q3 (1 July-30 September 2008). The Index is compiled from all relevant
transactions on Hotels.com, in local
currency, weighted to reflect the size of each market. The Index was started
in 2004 at 100, and includes all bookings across all star ratings. The
report largely compares prices paid in Q3 2008 with prices paid in the
same period in 2007, thereby removing the effect of seasonality.
- The second section (chapters 2-7) shows hotel prices across the world as paid by UK travellers
in Pounds Sterling. This shows the changes in real prices paid by consumers, reflecting both
movements in exchange rates and hotel pricing.
1. Global price changes
Global hotel prices have been falling since April 2008 as hoteliers respond to the economic slowdown.
In Q3 2008, Hotels.com witnessed the first
summer quarter fall in hotel prices year-on-year since the Hotel Price Index
began in 2004.
The average prices paid by travellers for hotels around the world during the period July-September
2008 fell by 3% globally, when compared to the same period in 2007.
This was driven by falls across North America, Latin America and the Caribbean in particular.
Prices in the other territories – Europe and Asia – were flat or rose only very slightly.
However, Hotels.com has witnessed no fall
in the numbers of people booking. Rather, travellers have been trading down
within the middle-tier (three and four stars) of the hotels category, taking
shorter breaks or have been staying in their own countries to save costs.
Prices fall across the Americas
- Prices paid by travellers for hotel rooms in North America (the US and
Canada), fell by 5% between Q3 2007 and Q3 2008.
- Prices for hotels in the Caribbean fell by 4% during the same period
and by 1% across Latin America.
- Prices across these regions started falling in Q1 2008 – on a year-on-year
basis – although the rate of fall steadily increased during Q2 2008 and
Q3 2008.
- The fall in price reflects the slowing economy, which has hit US domestic
demand, and higher air fares, which have deterred some European travellers.
European prices rise slightly
- Prices across the major European markets rose slightly in Q3 2008 when compared to the same
period 12 months before – up 2% on average.
-
However, there was a marked decrease in the rate at which prices rose. In Q1 2008, the 12 month
rise was 10% (compared to Q1 2007) while in Q2 2008, prices rose by 7% (when compared to
Q2 2007).
- Hotels.com has seen hoteliers slowing
the rate at which they raised prices – in an effort to maintain the numbers
of bookings and percentages of rooms they filled.
Asia prices flat
-
Prices for hotels across Asia were flat year-on-year – there was no change in the average price for
hotel rooms between Q3 2008 and Q3 2007.
-
This reflects a significant change from earlier in the year. In Q1 2008, prices paid were up 15%
on the same period in 2007, while in Q2 the annual rise was 12%.
back to the top
2. Top global city destinations
This section (and those that follow) reflects the real Pounds Sterling prices paid by travellers from the
UK during Q3 2008 – compared to prices paid during the same period a year before.
Whilst globally, prices in local currency have fallen, the fact that Sterling has weakened against many
currencies has meant that for UK travellers, many destinations may actually have become more expensive.
While UK travellers don’t always feel the benefit of falling local prices due to their own weakening
currency, there are still some locations where the price paid has fallen, especially in their home market.
Overall most expensive destinations
- Moscow
remained the most expensive city in the world in Q3 2008 for UK travellers.
The city posted an average rise of 8% (a slowing in the rise in prices,
but a rise nevertheless) to £207.
- New York
was the city in which UK travellers spent the second-highest sums for a
room per night, according to Hotels.com.
Average Sterling prices in the city rose by some 11% to £188 (compared to
£169 for the same period a year earlier). This is a good example of a destination
where the Pound’s fall in value has cancelled out the actual falls in local
prices charged.
- Monte Carlo was western
Europe’s most expensive major destination and the third most expensive
globally. Prices in the city rose by 31% year-on-year to average £176
from £135 a year earlier.
- The highest rises in prices paid by UK travellers occurred mainly in
European destinations. However, Melbourne
(where prices paid in Q3 2008 rose 24% when compared to the same period
a year earlier) and Singapore
(where prices paid were up 22%) also featured in the list of the ten biggest
risers.
- Prices paid by UK travellers rose to the greatest extent in Geneva
(where prices paid averaged £136) and Cologne
(£94) – prices in both cities were up by 32% year-on-year in Q3 2008.
- Closely behind was Monte Carlo,
which experienced a 31% rise in the average price paid by travellers from
£135 in Q3 2007 to £176 in Q3 2008.
- Las Vegas
saw prices paid drop by an average of 20% – down to just £58 per room,
per night in Q3 2008. This drop was despite a weaker pound relative to
the dollar. Hoteliers in the city have been slashing prices to ensure
occupancy levels remained high and are trying to make up for the loss
of convention trade.
- In the UK, both London
and Edinburgh
– historically among the most resilient of the major global destinations
– saw prices fall by 3% and 5% respectively as hoteliers sought to ensure
that rooms were filled and travellers hunted a bit harder for the bargains
available.
back to the top
3. European country destinations
Norway rises to become Europe’s most expensive country for UK travellers,
while UK is biggest faller
- Prices paid by UK travellers to Norway rose by some 10% between Q3 2007
and Q3 2008 to make it the most expensive nation in Europe. Prices averaged
£128 for travellers booking in the country between July and September
2008.
- Prices in Switzerland also rose (by some 21%) to make it the second
most expensive country on the continent at £122.
- Average prices paid by UK travellers to Denmark (where prices paid averaged £118) and Sweden
(£109) also rose (by some 13% year-on-year), meaning that Scandinavian nations made up three
of the four most expensive European nations for travellers from the UK.
- At the other end of the scale, prices paid in the UK fell by some 4% (to average just £97 in
Q3 2008). The fall was the biggest experienced by any major European destination and puts
the UK well-down the list of the most expensive countries for British travellers – a mantle that
it previously held.
- Switzerland – Europe’s second most expensive country – headed the European-price-rise league
table with average room rates up 21% in Q3 2008 when compared to prices in the same period
in 2007.
- The UK was the only major European destination to experience price drops
in Q3 2008.
- Prices in the UK fell by 4% on average in Q3 2008 when compared to the
same period in Q3 2007 – to £97 per room, per night from £101 a year before.
- Prices in Finland remained static.
- Otherwise, average prices paid rose across all of the major European
countries – although they rose slowest in Italy, Portugal and Hungary.
back to the top
4. Focus on UK
Prices fell across many of the major UK cities in Q3 2008 as hoteliers
– particularly those in Scotland – looked to ensure that occupancy levels
were maximised.
However, there were several notable exceptions to the national picture
as prices rose in the UK’s most expensive city – Bath. They were up by
some 13% in Q3 2008 (when compared to Q3 2007) to average £142 per night.
London prices fall while Bath rises fast
- Bath
was the UK destination that experienced the highest rise in average room
rates year-on-year – up 13%. The rise may be accounted for by the on-going
popularity of the spa city and the high number of top end hotels.
- Prices in London
fell by some 3% between Q3 2007 and Q3 2008 – they were down to £116 on
average.
Scotland
- Prices in all of the major Scottish cities fell in Q3 2008, when compared to 12 months before.
- Leading the falls was Inverness,
where prices fell 15% to average £94. Inverness
was closely followed by Aberdeen,
where prices fell by 11% to £96 on average.
- Prices in Edinburgh
– Scotland’s most expensive destination – fell by 5%, to average £106
per night, while prices in the nation’s least expensive city – Glasgow
– fell by 3%.
back to the top
5. Britons’ top destinations
London
was the most popular city destination among British travellers. The UK capital
led a list of domestic cities that included Manchester
(the fifth most popular UK city), Edinburgh
(eighth place), Glasgow
(thirteenth) and Birmingham
(twentieth).
Most UK cities rose up the table compared to the year before as travellers
stayed at home to save on travel costs and as the pound grew progressively
weaker, going less far overseas.
New York
was the most popular overseas destination for UK travellers during Q3 2008
as even more travellers than normal flocked to the city to take advantage
of the relatively cheap dollar which made shopping all the more attractive.
The proximity and ease of access to Paris
made the French capital the most popular continental European city destination
for UK travellers. The lack of language barriers and relatively cheap travel
meant that Dublin
came in at number four.
Other popular destinations were the main European capitals, which (with
the exception of Las
Vegas, San
Francisco and Los
Angeles) dominate the list of top cities for travellers from across
the UK.
back to the top
6. How far your pounds will go in the world’s top cities
Couples in search of luxury with £50 per night each to spend on their hotel
rooms would do well to head to Prague,
Las Vegas,
Berlin or
Dubai,
according to the Hotels.com Hotel Price
Index. In each of these cities, £100 per night will easily buy a four or even
five star hotel room.
Those with slightly less – around £75 per night for two, for example – should
stick to Prague,
where their money will buy a four star room.
back to the top
7. Average room prices by star rating
Hotels.com analysed the average prices
paid for hotel rooms across different star ratings in the world’s top cities.
The data demonstrates where UK travellers can find the best bargains. It also shows those cities
in which shopping around for the best deal can yield dividends: in some cases, travellers can trade
up a star-rating for just a few pounds.
back to the top
About Hotels.com
Hotels.com website is the most visited in the 'Hotels/Accommodation provider' category, according to comScore Media Metrix (Dec-Jan 2007).
Operating in all major markets with dedicated staff, www.hotels.com offers more than 80,000 quality hotels worldwide, and promises a price guarantee in 40,000 of these properties: if a customer can find the same deal for less, Hotels.com will match it. www.hotels.com also has one of the largest independent hotel teams in the industry, meaning that users get an honest review of the properties. Travellers can book online or by contacting one of our multi-lingual call centres on +44 (0)20 7492 0979
For further information visit www.hotels.com or call +44 (0)20 7492 0979
Download printable version (pdf, 156 KB)
