Hotels.com Price Index Shows Hotel Pricing Up 4 Percent Worldwide
By Claudette Covey
September 04, 2012 1:38 PM
The news on the hotel front seems to be taking on an increasingly rosier hue these days. Another survey of hotel pricing, the Hotel Price Index (HPI) released by Hotels.com on Sept. 4, paints a more positive picture the hotel market today, similar to the PwC and PKF surveys unveiled late last month. For the first time in five years, travelers paid more (up 4 percent on average) for hotel rooms on a global basis during the first six months of 2012 compared to the same period last year, according to the index.
That good news, however, was tempered by the fact that average prices remain at 2005 levels, according to the HPI. The index stood at 108 for this period, meaning that, despite the latest increase, hotel prices in general were still considerably lower than in the first half of 2007 when the HPI was at its peak of 119. The HPI analyzes prices that people paid for hotel rooms globally.
“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,” said Hotels.com President David Roche. “While initially it may not seem good news for consumers, hotel prices are still only around their 2005 level, representing great value for travelers when both wages and other prices have risen considerably.”
During the first six months of 2012, Pacific hotel rates were up 6 percent, North America was up 5 percent and Asia was up 4 percent. Latin America, Europe and the Middle East experienced the most sluggish growth, up just one percent each.
Following the turmoil of the Arab Spring in early 2011, the wave of demonstrations extending through the Middle East and North Africa, confidence returned to large portion of the Middle East and North Africa, and hotel prices rose accordingly, the HPI indicated. Roche said the impact of the Arab Spring on hotels is much diminished in 2012.
Like the Middle East, Asia hotel prices recovered once the Japanese began to travel again after the earthquake, tsunami and nuclear disaster last year, but it was the sizeable number of Chinese travelers that really helped to jumpstart higher rates, according to the HPI.
In the U.S., a rise in business travel coupled with higher consumer spending helped boost pricing and occupancy. In the Pacific, the mining boom in Australia translated into high occupancies, in Western Australia with international business visitors vying with mining executives for rooms.
Although rates rose as a whole in Europe, the results showed a mixed picture. One of the areas where prices dropped was in parts of the euro area where falling consumer confidence and spending power led to lower occupancy in the major cities and resort areas.