Eurozone Crisis Slows Rise In Global Hotel Prices
Increased buoyancy leads to 3% annual rise but growth held back by slump in European prices, according to latest Hotels.com Hotel Price Index
LONDON, March 5th, 2013 /PRNewswire/ — The average price of a hotel room around the world rose by 3% during 2012, compared with the previous year, according to the latest Hotels.com Hotel Price Index (HPI). The rate of increase has moderated when judged against the 4% rise in 2011 as the Eurozone’s problems pulled down the global average and slowed growth in the second half of the year.
Three regions drew away from the rest. The Caribbean saw a 6% rise, North America had one of its best results in recent years growing at 5% and the Pacific gained 4%, all outpacing the global figure. Asia added 2% and Latin America 1% while the Europe and Middle East region registered a slight fall.
Launched in 2004, the HPI looks at prices that people actually paid for their hotel rooms around the world. The 2012 Index stands at 107, ten points behind its 2007 peak of 117 and only just ahead of its 2005 level of 106.
David Roche, President Global Lodging Group for Expedia, Inc., said: “Europe’s hoteliers aren’t immune from the region’s economic problems, and they weren’t able to keep pace with a recovering global market in 2012. Although prices have risen globally, a hotel stay still offers consumers great value, with rates consistently below their peak levels of five years ago.”
The Eurozone crisis not only impacted prices in its own territory but had a knock-on effect across the region as financial insecurity dampened travel plans.
In the Caribbean, the trend towards more all-inclusive holidays has pushed up the average price paid. The US saw an influx of international visitors in 2012 which meant hotels had less need for discounting. In the Pacific, the mining boom in Australia and strength of the Australian dollar continued to drive strong city hotel rates but made it difficult for some leisure destinations dependent on inbound demand. Latin America has witnessed a sustained period of growth in prices paid by customers over the past few years, driven primarily by the booming economies in the two key markets of Brazil and Mexico.
In Asia, a roster of events moved prices up and down across the region, including downward pressure on rates in India, due to a precipitous fall of the Rupee, travel demand shifts due to the politically sensitive situation around the islands in the East China Sea, and price bounce-backs from the 2011 earthquake, tsunami and nuclear disaster in Japan and flooding in Thailand. The continued increase in the number of Chinese international travellers helped fill hotel rooms and the expansion of low cost carriers also boosted travel opportunities.
“International tourism is expected to climb again in 2013,” said David Roche. “Much of the focus of the hospitality industry is now moving east, where the rate of increase is the highest and new infrastructure is helping to drive travel patterns. The Asia/Pacific region added twice as many new hotel rooms as Europe in 2012 and will account for 40% of the world’s new builds in 2013. Rates here are rising but the region still offers great value for travellers with some of the lowest prices in the world.”
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