It may seem counterintuitive with all the news about slumping economies, but business travelers didn’t find many hotel bargains in first six months of 2008, according to a survey by travel management company Hogg Robinson Group (HRG).
All key European markets exhibited strong pricing growth, said HRG, including a 22% increase in Eastern Europe. Hotel rates in the Asia Pacific region rose 20%. Eastern Europe and Asia Pacific benefited from a continued focus on the luxury market and demand that outpaced supply, said HRG.
Rate growth was relatively flat in North America. HRG noted marginal declines of 3% and 2% in Houston and San Francisco, respectively, and no change in New York.
“As forecasted at the start of the year in our 2007 annual hotel survey, the midyear results have shown that the international hotel market continues to be resilient, with most regions seeing an increase in average rates in the first half of 2008, as demand continues to outstrip supply,” said Margaret Bowler, HRG’s director of global hotel relations. “However, we are increasingly seeing rates level off in certain markets as they adjust pricing structures to meet market expectations.”
The 10 most expensive cities for hotel stays during the first six months of 2008 were Moscow (average room rate of about $595), Mumbai ($405), Paris ($388), Milan ($388), Geneva ($365), Dubai ($365), Abu Dhabi ($363), New York ($361), Zurich ($360) and Stockholm ($358).
HRG said London dropped out of the top 10 to 16th, as the city's 2% rate growth was slower than in previous periods surveyed.
With the rise in rates, HRG said it noted some changes in travel patterns -- shorter trips and more use of alternatives to travel -- and it expected high rates to continue in cities with high demand and tight supply.
However, as demand lessens in certain cities, HRG expects rates to drop or to see changes in corporate deals that may strip out the extras to maintain a room rate that looks attractive.
The HRG survey was based on industry intelligence and rates paid by U.K. clients in the first six months of this year compared with the same period last year.