Global Hotel prices rises in 2012

According to a recent survey conducted by Hotels.com called the Hotel Price Index (HPI), overall the global hospitality sector seems to be recovering with a 4% increase in the first half of 2012. The bad news for Hoteliers is however that average prices remain at 2005 levels.

This is the first time in 5 years that travellers have paid more for their hotel rooms during the first 6 months of the year in all areas of the world. The global 4% rise, compared to the same period the year before, demonstrated that the economic recovery in the hotel industry was well-established.

The HPI only considers prices that people paid for their hotel nights. More specifically here below are some of the results...

• Pacific rates up 6%
• North America up 5%
• Asia up 4% 
• Latin America up 1%
• Europe up 1%
• Middle East up 1%.

David Roche, President, Hotels.com, said: “The hotel industry bounced back in the first half of this year from a number of natural and political crises in 2011 and it is encouraging to see growth in the sector. While initially it may not seem good news for consumers, hotel prices are still only around their 2005 level, representing great value for travellers when both wages and other prices have risen considerably.”

The most significant reasons for the rise are:

1. The Pacific saw resources boom in Australia causing space to be at a premium, most significantly in Western Australia.
2. Improved business travel in synergy with higher consumer spending allowed hotels to be busier (less need for discounting) in the US. 
3. Recovery from japanese Earthquake: The Japanese began to travel again following the earthquake, tsunami and nuclear disaster of March 2011.
4. A notable increase in Chinese international travellers boosted Hotel rates higher and enabled expansion in Asia concerning low cost carriers (example: Peach Aviation & Scoot). 
5. Recovery from Arab Spring: Confidence returned to the Middle East and North Africa in general and hotel which positively impacted on Hotel prices.

Even though Hotel rates increased overall in Europe, the results presented mixed fortunes. Falling consumer confidence and lower spending power were the main reasons. 

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