Global Sticker Shock, According to Smith Travel Research
Hotel rates have risen this year in the top international cities--in some cases by shocking amounts. That's according to Smith Travel Research, which studied rates, occupancy, and supply and demand in 15 key markets, 12 of them outside the U.S.
Measured in U.S. dollars, hotels in Berlin; Buenos Aires, Argentina; and Hong Kong cost between 16.5 percent and 17.9 percent more in the first four months of this year compared to 2006, according to STR. But that was nothing compared to an eye-popping 25.6 percent gain in London; and 33.7 percent more for a room in Singapore than a year ago. Some of the increases are partly accounted for by currency exchange rate fluctuations, but meeting planners might wince at the numbers, nonetheless.
The only overseas markets in the study with lower than 10 percent rate inflation were Johannesburg, South Africa (1.1 percent); Dubai (6.4 percent), United Arab Emirates; and Tokyo (8.2 percent).
Big rate hikes often reflect gains in occupancy, but that was not the case in these markets. London saw a marginal 0.7 percent occupancy growth, and Singapore just 2.6 percent. Amazingly, Buenos Aires was able to secure its 17.9 percent rate increase despite a 6.1 occupancy decline. Only somewhat less egregious was Hong Kong, where a 17.7 percent rate jump did not mirror a 2 percent occupancy falloff.
In raw dollars, the most expensive of the overseas markets was Dubai, with an average daily rate of $233 for the 12-month period ended April 30. Next were Paris ($229, with a 13.3 percent increase in the first third of 2007), London ($217), Tokyo ($168), and Hong Kong ($164). The only city on the list below $121 was Sao Paulo, Brazil at $77, despite registering the largest occupancy increase at 9.1 percent.
As for room supply, the only market with a notable change was Dubai, where there was an impressive 9 percent more rooms at the end of April than a year earlier. Tokyo was the only overseas city studied that declined in hotel rooms (1.6 percent).
Looking for some good news? If you're intent on taking a meeting to another country, there's this: None of the overseas markets was as expensive as New York, where the average daily rate for 2007 stood at $247.91 through April.
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© 2012 Penton Media Inc.
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