The Hotel Price Index: Review of Global Hotel Prices: 2010

The Hotel Price Index
Review of global hotel prices: 2010
TM
Introduction
The Hotels.com Hotel Price IndexTM (HPI) is a regular survey of hotel prices in major destinations across the world. The HPI is based on bookings made on Hotels.com and prices shown are those actually paid by customers (rather than advertised rates) in 2010. Now in its seventh year, the HPI is respected as the definitive report on hotel prices paid around the world and increasingly used as a reference tool by media, analysts, tourism bodies and academics. The HPITM tracks the real prices paid per room by Hotels.com customers around the world using a weighted average based on the number of rooms sold in each of the markets that Hotels.com operates in. Approximately 110,000 properties in more than 18,000 global locations make up the sample set of hotels from which prices are taken. The international scale of Hotels.com (in terms of both customers and destinations) makes the Hotel Price Index one of the most comprehensive benchmarks available, as it incorporates both chain and independent hotels, as well as options such as self-catering and bed and breakfast properties.
Foreword
On the rebound?
Reading our seventh annual Hotel Price Index reminded me of a joke about two economists meeting at a conference. First economist: Hows your wife? Second economist: Relative to what? After the worst trading conditions most in the market had seen, our 2010 story shows a market in recovery, and allows us, for now, to call the bottom of it at around the turn of 2009. Such pronouncements are all relative. The average price of a hotel night grew by 2% globally last year. However, since the fall was so prolonged and steep, guests were still roughly paying what they would have done six or seven years ago. Whilst the high volume of promotions we saw in the depth of the crisis has dried up somewhat, there are still deals to be had. Averages tend to mislead. Any recovery story would ring hollow in say Ireland or Spain, where local economic problems have spilled over into the hotel market. Meanwhile, we can see much stronger recovery in global business centres, and both Asian and luxury markets look buoyant, despite significant increases in capacity. Viewed from Hotels.com as good a vantage point as any given the breadth of our supply and sales - the story of 2010, and likely 2011, has four key themes.
David Roche President of Hotels.com
First, business travel, and the associated convention trade, is back. This is reflected in higher occupancy levels for the major business centres and higher star rating hotels. By October last year, occupancy in London was running at over 90%, with Barcelona, Paris and Amsterdam all running at over 80% (TRI Hospitality Consulting). The HPI shows the increase in prices from these higher occupancy rates in most major business destinations from the booming Asian markets of Singapore and Shanghai to London and New York. Even Las Vegas, a watchword for knockdown prices in the recession, saw a significant rise in prices as the convention business returned. Second, although the return of the business traveller accounts for the biggest swing in occupancy, and therefore pricing, this isnt just a business story. Travel in general staged something of a recovery. International arrivals grew over 5% in 2010, having fallen by 4% the previous year (WTO). Those who are travelling are spending more. Occupancy in luxury properties in the US, for example, is running between ten and fifteen points higher than in the lower star categories. Although weve once again compiled a list of the cheapest places for a luxury stay, its a shorter one than it would have been eighteen months ago.
The Hotel Price Index Review of hotel prices in 2010
So if the occupancy story has signs of strength, why arent prices recovering more strongly? Here, the previous point about misleading averages is worth remembering in many places in the survey, they are, albeit from low bases. The other force acting on prices is supply, which has continued to expand, if a touch more selectively, through the downturn. London is in the process of adding 12,000 rooms in the run up to the 2012 Olympics, with a particular focus on the luxury sector. Paris expects a 70% increase in luxury hotel capacity in the next two years (Smith Travel Research). STR also reported 310 hotels under construction in Europe at the mid-point of our survey. This trend is more than mirrored in the faster growing Asian and Latin American markets. So, although financing has undoubtedly been tighter, building has continued, and may well continue to act as a brake on prices in the future. Lastly, promotions, whilst still widespread, have become more selective. The pricing trends in this report still reflect hoteliers use of attractive discounts to attract consumers who have grown used to discounting across many shopping categories. This likely permanent change in consumers mindsets means that promotions and deals are unlikely to dry up, and will again form some sort of bulwark against trends that would otherwise see faster rises in the price of a hotel.
So overall, 2010 I think is the story of a recovery, even if it is one that had, and is likely to continue having, particular twists and turns. The pages of this report contain the usual stories for each destination, from World Cups to Icelandic volcanoes, and their impact on the price of a hotel. One thing is for certain. As we pass our 20th anniversary in 2011, the team at Hotels.com is more determined than ever to offer consumers great deals and all the information they need to book the right hotel.
Contents
1. Global price changes in 2010
Overall By region
2. Global city destinations

Prices across the worlds cities Highest price rises and falls
3. Price changes by country 4. Focus on the UK 5. Prices paid at home and away 6. Where to go for 100 a night 7. Average room prices by star rating 8. Luxury for less 9. Travel habits
Top UK destinations for UK travellers Top overseas destinations for UK travellers Top UK destinations for travellers from overseas
In the HPI report, we focus on two main sources of data: The first section (chapter 1) shows the global Hotel Price Index for 2010. The Index is compiled from all relevant transactions on Hotels.com, in local currency, weighted to reflect the size of each market. By representing hotel price movements in an index, Hotels.com can illustrate the actual price movements as felt by consumers without foreign exchange fluctuations distorting the picture. The Index was started in 2004 at a benchmark of 100, and includes all bookings across all star ratings.
The report largely compares prices paid in 2010 with prices paid in 2009. The second section (chapters 2-9) shows hotel prices across the world as paid by UK travellers in Pounds Sterling. This shows the changes in real prices paid by consumers, reflecting both movements in exchange rates and hotel pricing.
1. Global price changes in 2010

The average price of a hotel room around the world rose 2% in 2010 but was still only at the level it was in 2004 when the Hotels.com Hotel Price Index was launched. The small rise took the average cost of a room to 100 on the Index, the level it was six years ago. Prices remained flat in Europe, rose just 1% in Latin America and the Caribbean and fell by 2% in Asia. However, the average was boosted by a 2% rise in North America.
European prices stay flat in 2010

Prices paid by travellers for hotel rooms in Europe stayed flat compared to 2009. Prices had fallen for seven consecutive quarters going into 2010 so the stabilisation during the year will be welcomed by hoteliers. The Hotel Price Index for Europe stood at 99 at the end of 2010, flat from the previous year. That means that the average cost of a room in Europe is now 1% less than it was in 2004 when the Hotel Price Index was launched and 20% lower than when the average European price peaked in Q2 2007.
Figure 1 HPI quarterly breakdown for Q1 2004 to Q4 2010 globally
130 120 Index Points 110 100 90 80

Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10
Figure 2 HPI by quarter, by region, Europe, Asia - Pacific, North America, Latin America and Caribbean 2004 - 2010
180 160 Asia - Pacific Caribbean Europe Latin America North America
Index Points
140 120 100 80

Q1 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q2 04 Q4 10
North America shows small increase

Prices paid by travellers for hotel rooms in North America (the US and Canada) rose 2% in 2010. The North American HPI stood at 98 at the end of year. The year started with the ninth consecutive quarterly fall of 2% in the first quarter but then picked up with increases of 3%, 4% and 3% respectively in the second, third and fourth quarters. Stronger demand from both leisure and business travellers seems to have emboldened hoteliers to raise rates. Despite the small rises, room rates were still 2% lower than when the HPI was started in 2004.
Prices for the Caribbean rose by 1% year-on-year. The stabilisation came after two years of successive falls in 2008 and 2009. At the end of 2010, the HPI for the Caribbean stood at 114 points, still 16 points down on its 2007 peak.
Prices across Latin America also rose by 1% taking its HPI to 111, still 22 points short of its 2007 high.
Asia sees overall price falls despite growth in Chinese economy

Average prices paid for hotel rooms in Asia - Pacific fell 2% during 2010.
However, the Hotel Price Index for Asia - Pacific in 2010 stood at 115, 15% higher than when the HPI was launched in 2004. This shows prices overall have increased during the period from 2004 to 2010.
North America
The Index is back to Q3 2009 levels but the region now exhibits a very varying landscape. For example, Thailand suffered from political unrest and having a relatively large supply base; Japan faced challenges in the continued slow domestic economy and a strong currency; Singapore on the other hand recorded significant increases thanks to the strong bounce back of corporate travellers and new tourist attractions and Shanghai price points were boosted by the successful World Expo.
When Is A Deal Really A Deal

The closer the 2010 HPI is to its 2004 starting point of 100 the better the value. North America offered outstanding value with average prices less than they were six years ago, with the HPI standing at 98. This was despite an overall 2% increase, fuelled by rising occupancy levels, especially in more upscale hotels, and shrinking discounts. However, even though Asia saw overall price falls of 2%, there was less value to be had compared to 2004 with the 2010 HPI 15% higher. Travellers looking for good deals should avoid booking at peak times if at all possible and be aware of currency fluctuations.
China
2. Price changes in global city destinations

The following sections reflect the real Pound Sterling () prices paid by travellers from the UK during 2010 compared to prices paid in Pound Sterling a year before. UK travellers faced a tough year in 2010 with price rises in many of their favourite destinations. This could in part be explained by the diminishing value of Sterling but it was also due to hoteliers raising rates and offering fewer discounts. Price changes also seemed to reflect the volatile state of the world economy with cities in struggling western countries seeing falls but fast-developing nations such as Brazil, China and India all witnessing double-digit percentage increases.
A World Cup double whammy

Englands disappointing early exit from the 2010 World Cup tournament in South Africa wasnt the only thing travellers had to contend with in 2010. There were big price rises in Cape Town to 122 (28%) where many England fans were based, and in Johannesburg to 120 (7%) as demand soared. The World Cup effect is something for fans to be aware of not least for the 2022 competition in Qatar, with Doha already one of the most expensive cities at 169 after a 5% rise. Moscow, a host city for the 2018 tournament, also proved costly at 149.
Middle Eastern promise

The oil-rich Middle East had two cities (Muscat and Doha) in the top three most expensive destinations, reflecting both the small number of hotel rooms and the strength of demand for premium accommodation from both business and leisure travellers. Despite economic problems, Dubai was also in the top 20 at 120 a night on average, finishing the year with just a 1% fall in prices year on year. This was largely fuelled by hotels at the top end of the market. Another Emirate, Abu Dhabi, also featured in the most expensive list despite prices falling a huge 27% to average 116 a night.
Muscat
America still appeals despite price rises

Leisure and business travellers still flocked to the US despite having to contend with big price increases in some of their favourite destinations as the Pound struggled against the Dollar as the year developed. New York was one of the most expensive cities in the world for UK visitors after a 12% rise took the average hotel price to 166, and Washington DC saw a similar jump to 132.
Miami saw a 14% increase to 119, a trend reflected by other Florida destinations such as Orlando at 63 after an 18% jump. Another popular destination, Las Vegas, registered an average hotel price of 71 - a 20% hike. Overall though, prices were still lower than 2004, providing some great value options. The flat oil price also helped keep demand for hotels healthy as it made road trips more affordable.
Figure 3 Growth in average UK salary compared to HPI 2004 - 2010

20 15 % Growth Rate
Seven years of value for UK travellers

UK travellers could get more value for money when booking hotel rooms in 2010 than they did seven years before when the HPI launched. Average salaries have jumped 19% since 2004 yet average hotel prices are still at
2004 2005 2006 2007 2008 2009 2010
10 5 0
-5
the same level.
HPI Index % Difference: 2004 - 2010
Average UK Salary Growth Rate: 2004 - 2010 (ONS)
A mixed picture for Europe

Monte Carlo became the most expensive European city at 170 after the average hotel price took a 9% leap year on year, followed by Geneva at 152 per night (up 7%). There were similar rises for Paris (up 8%) and Amsterdam (up 9%). Rooms in Germanys financial centre of Frankfurt hit 102 on average per night (up 14%), indicating a high corporate demand to do business there. However, the economic uncertainty in some Eurozone nations was reflected by price falls in Dublin (down 7%) and Athens (down 3%). Eastern European cities also saw price drops with Zagreb (down 20%), Sofia (down 19%), Bucharest (down 13%), Tallinn (down 11%) and Budapest (down 8%). Moscow was one of the places to buck the trend with a 1% rise to average 149 per night. There were some big rises in up-and-coming destinations in the list of the worlds most expensive places. Prices in the Maltese capital of Valletta went up by 14% and by 16% in Tel Aviv. The Norwegian city of Bergen experienced a 29% rise, as leisure travellers came back after the recession of 2009 pushing up prices.
Figure 4 Average hotel prices in 2010 compared to 2009
Destination
Average price per room per night 2009

217 156 160 148 154 142 148 126 111 119 108 117 130 107 97 96 112 122 112 104

185 170 169 166 163 152 149 143 142 139 139 132 127 126 123 122 121 120 120 119
% Change year on year
Muscat Monte Carlo Doha New York Maui Geneva Moscow Valletta Bergen Tel Aviv Rio De Janeiro Washington Venice Nairobi Singapore Cape Town Paris Dubai Johannesburg Miami
-15% 9% 5% 12% 6% 7% 1% 14% 29% 16% 28% 12% -3% 18% 26% 28% 8% -1% 7% 14%
10
Destination

84 159 104 105 110 100 97 103 97 122 96 100 106 96 81 111 85 101 108 89 89

118 116 114 114 114 113 108 106 106 105 105 104 104 103 103 103 102 102 102 102 99
Destination

80 93 82 87 80 69 94 79 86 78 78 80 76 59 66 73 65 70 54 60 60

98 95 94 94 93 91 91 90 89 87 86 74 72 71 70 68 67 65 63 58 54
Sao Paulo Abu Dhabi LONDON Oslo Rome Stockholm Milan Mumbai Amsterdam Jerusalem Vancouver Los Angeles Tokyo Honolulu Hong Kong Copenhagen Sydney Chicago Cairo Frankfurt San Francisco
41% -27% 10% 9% 4% 13% 12% 4% 9% -14% 9% 4% -3% 8% 27% -7% 21% 2% -5% 14% 11%
Cancun Istanbul Toronto Vienna New Orleans Shanghai Athens Buenos Aires Brussels Melbourne Guangzhou Marrakech Reykjavik Las Vegas Warsaw Dublin Prague Budapest Orlando Bangkok Tallinn
21% 3% 15% 8% 17% 33% -3% 14% 4% 11% 11% -7% -6% 20% 5% -7% 3% -8% 18% -3% -11% 11
Figure 5 The biggest percentage price rises in 2010 compared with 2009
Cape Town
Destination

84 69 96 111 96 108 81 85 80 73 52 59 66

118 91 128 142 122 139 103 102 98 88 62 71 79
Sao Paulo Shanghai Biarritz Bergen Cape Town Rio de Janeiro Hong Kong Sydney Cancun Colombo Jaipur Las Vegas Anaheim
41% 33% 33% 29% 28% 28% 27% 21% 21% 21% 21% 20% 19%
average room rates, largely as a result of the strong Brazilian currency and booming economy. These factors were also reflected in China with Hong Kong witnessing a 27% rise and Shanghai a 33% increase. Las Vegas, synonymous with knockdown prices during the recession saw a 20% price rise as the convention business returned. A hotel room in Jaipur on the Golden Triangle tourist route surged 21% in price to average 62 a night and the average rate in Cancun leapt by a similar amount benefitting from new luxury hotels and British Airways launching a direct flight to the resort.
The heaviest rises year-on-year for UK travellers came in the non-Euro destinations. Hotel rates served as a good barometer of the growing importance and development of cities in rapidly-developing countries.
Rio de Janeiro and Sao Paulo in Brazil saw staggering increases of 28% and 41% respectively in
12
50% 40% 30%

Rio de Janeiro
20%
Cape Town Sao Paulo Shanghai Biarritz Bergen
Hong Kong
Muscat
Casablanca
Leipzig
Kiev
Sofia
Zagreb
Detroit
Osaka
Phnom Penh
-10% -20% -30%
Figure 6 The biggest percentage price rises and falls in 2010 compared with 2009
Figure 7 The biggest percentage price falls in 2010 compared with 2009
Destination
Destination

159 93 105 78 67 103 78

116 69 78 60 52 82 64

Kiev -27% -26% -25% -23% -22% -20% -19% Leipzig Casablanca Muscat

119 70 93 217

99 58 78 185
Abu Dhabi
Chennai
0%
Anaheim
Cancun
Sydney
Jaipur
10%
Las Vegas
Colombo
-17% -17% -16% -15%
Abu Dhabi Osaka Chennai Detroit Phnom Penh Zagreb Sofia
Abu Dhabi was the city in which prices paid by UK travellers fell furthest, according to the Hotels.com Hotel Price Index. The average price for a room in the Emirate plunged by nearly a third (down 27%) to 116 over the
The Hotel Price Index Review of hotel prices in 2010 13
course of the year. This was fuelled by a combination of growth in the number of rooms, as new hotels opened, and a drop in the number of corporate travellers visiting, due to the economic downturn. Eastern European cities saw big falls, offering excellent value for UK travellers. Zagreb, where prices fell 20%, Sofia 19%, Kiev 17% and Leipzig 17%, all featured in the top ten list of biggest fallers.
San Francisco 99 11% Las Vegas 71 20% Los Angeles 104 4% Toronto 94 15% New York 166 12%
Buenos Aires 90 14%
14
Global hotel price changes 2009 - 2010

Moscow 149 1% Dublin 68 7% Paris 121 8% Monte Carlo 170 9% Marrakech 74 7% London 114 10% Geneva 152 7% Milan 108 12% Beirut 140 13% Shanghai 91 33% Doha 169 5% Dubai 120 1% Mumbai 106 4% Bangkok 58 3% Singapore 123 26% Hong Kong 103 27% Tokyo 104 3%
Muscat 185 15%
Rio De Janeiro 139 28%
Johannesburg 120 7%
Cape Town 122 28%
Sydney 102 21% Melbourne 87 11%
15
3. Price changes by country

Prices rose in more than three quarters of popular countries favoured by UK travellers, albeit from a low level in 2009. Russia retained its place as the most expensive country for UK visitors with average room rates reaching 132, followed closely by Switzerland (131) and Brazil (129) which saw a 24% leap in prices fuelled by high demand and a strong local currency, a possible shape of things to come for football supporters travelling to the next World Cup in 2014. The biggest percentage price rise of 26% happened in Singapore, partially on the back of new luxury hotel developments. There was a 21% rise in the average hotel price in China, reflecting its economys phenomenal growth, and in South Africa, largely as a result of the World Cup, with average room prices hitting 118. Australia experienced an 18% jump in the average room price, partly due to its strong currency, but hotels still offered good value at 95. There was a similar picture in New Zealand with a 13% rise, but the average room price was still just 65. North America saw increases in the US where the average room rate rose 4% to 105 and in Canada where the average rate rose 10% to 100. Further south, there were also rises in Mexico to 94 (up 6%) and in Argentina 91 (up 10%).
Moscow
At the other end of the scale, Morocco was the biggest faller (down 10%) and Iceland was also badly hit (down 6%), largely as a result of the volcanic ash cloud in the early part of the year. Eastern Europe again offered good value with Poland the cheapest country for UK travellers with rooms averaging 64 a night, Hungary at 65 and Czech Republic at 67. The most expensive Eurozone country was Italy where the average room rate rose 3% to 107. France on 101 (up 3%) pipped the Netherlands on 99 (up 6%). Ireland was the cheapest Eurozone country for UK travellers at 69 (down 4%).
16
However, Switzerland retained its place as the most expensive European nation for a hotel room at 131 a night (up 6%), followed by Norway at 120 (up 12%) and Croatia at 115. Despite seeing a 2% rise, a hotel room in the UK cost on average 83 a night, 12 below the average in the countries surveyed, perhaps indicating one of the appeals of the staycation holiday for travellers looking for competitive deals at a time of shrinking household budgets. Figure 8 Average room prices and changes in 2010 compared with 2009 by country
Destination

101 96 110 98 92 94 105 92 91 93 81 90 88 86 76 96 90 83 87 102

105 105 102 101 100 99 98 98 98 97 95 94 94 93 92 91 91 91 90 88
United States of America Sweden Denmark France Canada Netherlands Japan Greece South Korea Turkey
4% 9% -7% 3% 10% 6% -6% 6% 7% 4% 18% 4% 6% 8% 21% -5% 1% 10% 4% -14%
Destination

131 123 104 123 97 107 125 98 115 103

132 131 129 128 123 120 119 118 115 107
Russia Switzerland Brazil Israel Singapore Norway United Arab Emirates South Africa Croatia Italy
1% 6% 24% 4% 26% 12% -4% 21% 0% 3%
Australia Indonesia Mexico Austria China Finland Belgium Argentina Egypt Taiwan
17
Destination

84 84 81 82

86 85 83 81 81 78 74 72 69 67 65 65 65 64
New York
India Germany UNITED KINGDOM Portugal
3% 1% 2% -2% 0% 18% -6% -10% -4% 3% -8% -2% 13% -1% Singapore Singapore Brazil South Africa China Australia Mexico United States of America Turkey Egypt France
Spain & Canary Islands 81 Malaysia Iceland Morocco Ireland Czech Republic Hungary Thailand New Zealand Poland 66 79 80 72 65 70 66 57 65
Figure 9 Average room prices and changes in 2010 compared with 2009 by price rises
Destination

97 104 98 76 81 88 101 93 87 98

123 129 118 92 95 94 105 97 90 101
26% 24% 21% 21% 18% 6% 4% 4% 4% 3%
18
Figure 10 Average room prices and changes for 2010, compared to 2009 by price falls
Dubai
Destination

102 80 70 110 105 79 125 72 82 66

88 72 65 102 98 74 119 69 81 65
Taiwan Morocco Hungary Denmark Japan Iceland United Arab Emirates Ireland Portugal Thailand
-14% -10% -8% -7% -6% -6% -4% -4% -2% -2%
19
4. Focus on the UK
Hotel room rates rose on average by 2% - from 81 to 83 a night - across the UK from 2009 to 2010, a percentage increase mirroring the global pattern. However, the overall picture masks some dramatic price movements across the country. Many of the major tourist destinations saw some of the highest percentage price rises, as more budget-conscious Britons stayed at home and a return of US travellers after the fall in 2009. Prices in London rose 10% to 114 and Oxford 9% to 99. Lake District destinations also witnessed increases with prices in Bowness-on-Windermere hitting 142, up 23%, and Ambleside 113, a 6% rise as hoteliers were confident enough of visitors to put up their rates. The most expensive place was St Andrews in Scotland at 162 a night on average a 20% jump, partly caused by the British Open golf tournament. St Andrews pushed Bath from the top spot, with the spa city falling to fourth place in the table. Hotels in towns and cities near the M4 corridor home to the UKs growing IT industry saw double-digit rises: Bracknell (up 18%) and Reading (up 15%). However, the steepest rise was in Norwich where prices rose 38%.
London
Other notable rises include those seen in Wolverhampton (up 27%) and Stoke-on-Trent (up 28%) which has seen increased visitor numbers since the football club entered the Premier League in 2008. At the other end of the scale, the Welsh cities of Cardiff (down 6%) and Swansea (down 14%) saw sharp falls to 76 and 69 respectively.
20
120
150
180
60
30 90
0
St Andrews Bowness-on-Windermere London Bath Ambleside St Peter Port Edinburgh Oxford Cambridge York Brighton UNITED KINGDOM Newcastle-upon-Tyne Bracknell Norwich Liverpool Manchester Cardiff Inverness Bournemouth Cheltenham Bristol Reading Glasgow Southampton Swansea Belfast Leeds Birmingham Sheffield Stoke-on-Trent Nottingham Bradford Wolverhampton
The Hotel Price Index Review of hotel prices in 2010 21
Average price per room per night 2010 ()

Figure 11 Average price per room per night and price rise and fall in 2010 compared to 2009 across the UK
Price rise year on year (%) Price fall year on year (%)
St Andrews
Destination

91 95 87 82

99 94 86 84 83 82 80 78 77 77 76 76 73 71 71 71 71 69 69
Oxford Cambridge York Brighton
9% -1% -1% 2% 2% 4% 18% 38% 4% 3% -6% 9% 7% 2% 2% 15% -2% 13% -14%
UNITED KINGDOM 81 Newcastle-uponTyne Bracknell 79 68 56 75 75 81 70 69 69 70 62 72 61 81
Figure 12 Average room prices and changes in 2010 across the UK Destination
Norwich Liverpool

135 115 104 110 106 110 96

162 142 114 113 113 105 101
Manchester Cardiff Inverness
St Andrews Bowness-onWindermere London Bath Ambleside St Peter Port Edinburgh
20% 23% 10% 2% 6% -5% 5%
Bournemouth Cheltenham Bristol Reading Glasgow Southampton Swansea
22
Destination

66 66 57 60 46 54 55 36

68 66 61 60 59 57 51 46
Edinburgh
Belfast Leeds Birmingham Sheffield Stoke-on-Trent Nottingham Bradford Wolverhampton
3% 0% 6% 0% 28% 6% -7% 27% Brighton
Figure 13 Average room prices and changes in 2010: Scotland Destination

96 86 74 70 72 56

101 78 77 76 71 68
Edinburgh Stirling Aberdeen Inverness Glasgow Perth
5% -10% 5% 9% -2% 22%
Prices in the Scottish capital of Edinburgh rallied by 5% in 2010 to average 101 a night. More flights
23
into Edinburgh Airport, the British Open golf tournament, Edinburgh Festival and marathon all attracted record visitor numbers in 2010. The average price paid in Inverness was also substantially up, this time by 9%, taking room rates to 76 on average. This came on the back of a surge in demand from travellers heading to the Scottish Highlands. Perth, on the key A9 route northwards, also saw a huge 22% spike to 68. Aberdeen finished the year posting a 5% rise in prices even though there had been a 5% fall in Q2 as hotels tried to sustain occupancy. However, it was not all good news for Scottish hoteliers with Stirling suffering a 10% drop to 78 after a strong 2009 with the Homecoming events. Glasgow saw a smaller 2% drop as a result of a fall in conference business at hotels and therefore lower business bookings.
Aberdeen
24
UK hotel price changes 2009 - 2010

St. Andrews 162 20% Glasgow 71 2%
Edinburgh 101 5%
Newcastle-upon-Tyne 82 4% Belfast 68 3%
Leeds 66 1% Manchester 77 3% Liverpool 77 4%
Leicester 49 1% Birmingham 61 6% Norwich 78 38%
Cardiff 76 6%
London 114 10%
Portsmouth 78 0%
Brighton 84 2%
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5. Prices paid at home and away

US travellers are the biggest spenders on hotel rooms when they travel abroad, according to the Hotels.com Hotel Price Index. They spend an average 104 a night on hotel rooms when they head overseas, 1 more than Russian travellers. At the other end of the scale, South Africans are the savviest when outside their borders, parting with just 56 a night, according to the report. UK travellers are joint eighth in the table of biggest spenders, splashing out on average 95 abroad along with the Swedes. However, they spend 12 less - 83 a night - on domestic hotel rooms. The biggest domestic spenders are the Norwegians and Singaporeans who both spend an average 117 a night on hotel rooms at home. Travellers from India are those with the best eye for value within their own borders, spending just 59 when in a domestic destination.
Las Vegas
Udaipur
26
Figure 14 Average room prices paid by travellers when travelling within their own countries versus those paid overseas in 2010
Nationality
Nationality
Average price paid per room when travelling within own country HOME
117 117 106 97 97 95 93 91 90 84 83 81 74 74 74
Average price paid per room when travelling abroad AWAY

98 85 103 100 91 95 93 56 99 87 95 91 104 99 86
Average price paid per room when travelling within own country HOME
71 70 70 67 59
Average price paid per room when travelling abroad AWAY

74 87 94 90 96
Mexico France Ireland Spain & Canary Islands India
Norway Singapore Russia Japan Denmark Sweden Brazil South Africa Australia Netherlands UNITED KINGDOM Italy USA Portugal Germany
27
6. Where to go for 100 a night

With the emphasis on value for money, travellers with 100 a night to spend on their hotel room could choose from a wide selection of destinations as they searched for luxury for less. Nine cities now offer five-star hotel accommodation for 100 a night, with five within a four-hour flight from the UK. Those prepared to travel further afield can sample the best for less than three figures in Buenos Aires, Guangzhou, Jakarta and Santiago. In comparison, 100 will buy you a three-star hotel room in London and only one star in New York. Figure 15 The star rating that can be purchased with 100 per night in the worlds top cities
Destination
Buenos Aires Guangzhou Jakarta Marrakech Santiago Warsaw
GBP 100
5 5 5 5 5 5 5 5 5 4 4 4 4 4 4 4 4
Buenos Aires
Budapest Lisbon Tallinn Bangkok Prague Berlin Cairo Beijing Dublin Las Vegas Helsinki
28
Destination
Madrid Melbourne Vienna Dubai Istanbul Shanghai Barcelona Mexico City Sydney Taipei Bali Frankfurt Munich Cape Town Edinburgh Hong Kong Mumbai Milan Orlando New Delhi
GBP 100
4 4 4 4 4 4 4 4 4 4 3 3 3 3 3 3 3 3 3 3
Destination
Amsterdam Chicago Copenhagen Stockholm Cancun LONDON Moscow Nice Rome Toronto Singapore Tokyo Los Angeles San Francisco Vancouver Miami Montreal Venice Paris New York
GBP 100
3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 2 1
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7. Average room prices by star rating

Hotels.com analysed the average prices paid for hotel rooms across different star ratings in the worlds top cities. The data demonstrates where UK travellers can find best value. It also highlights those cities where shopping around for the best deal can yield dividends: in some cases, travellers can end up paying more for a property with a lower star rating. The Polish capital of Warsaw offers the best deal on luxury for less with five-star accommodation costing just 75 a night with Marrakech in Morocco serving it up for just 15 more. Jakarta provides four-star luxury for only 65. At the other end of the scale, New York offers the most expensive five-star and four-star hotel rooms at 400 and 217 respectively. Geneva is the second most expensive five-star provider on 300. London offers it for 212.
Warsaw
Figure 16 Top 10 most expensive cities for 5 star hotels
400 350 300
Pounds ()
250 200 150

Los Angeles
Cape Town
100
New York Tokyo Paris
San Francisco
Hotel star ratings explained

There is no universal star-rating system. Each country has its own, and in some cases, such as the UK, more than one. This means travellers should be aware of a possible disparity of standards and facilities when booking rooms with the same star ratings in different countries.
30
Venice
Nice
50
Jerusalem
Geneva
Figure 17 Average hotel room prices by star rating during 2010
Destination
Istanbul 42 N/A N/A 30 46 64 67 60 N/A N/A 32 62 N/A 69 N/A 45 62 26 120 70 38 90 74 65 N/A 81 46 59 88 90 73 50 56 54 101 72 101 85 72 84 53 167 82 65 104 108 92 65 N/A 82 78 127 164 83 64 88 102 160 113 129 135 106 103 132 217 140 114 119 167 133 N/A 225 131 101 212 265 135 90 129 N/A 206 203 N/A 196 146 158 171 400 238 170 147 296 Jakarta Jerusalem Las Vegas Lisbon London Los Angeles Madrid Marrakech Melbourne Mexico City Miami Milan Montreal Moscow Mumbai Munich New Delhi New York Nice Orlando Oslo Paris
Destination
Amsterdam Bali Bangkok Barcelona Beijing Berlin Boston Budapest Buenos Aires Cairo Cancun Cape Town Chicago Copenhagen Dubai Dublin Edinburgh Frankfurt Geneva Guangzhou Helsinki Hong Kong 76 N/A 26 66 37 56 86 35 41 91 39 94 71 70 48 51 70 61 N/A N/A N/A 39 89 45 30 85 39 56 119 42 79 36 85 70 91 92 50 58 87 74 119 63 89 71 113 105 66 98 68 76 153 63 97 78 131 108 116 110 84 73 104 103 151 90 88 109 152 159 115 157 128 115 N/A 101 N/A 118 N/A 240 N/A 155 180 130 153 160 300 N/A 134 188
31
Destination
Prague Rio de Janeiro Rome San Francisco Santiago Sao Paulo Seattle Seoul Shanghai Singapore Stockholm Sydney Taipei Tallinn Tokyo Toronto Vancouver Venice Vienna Warsaw Washington 40 97 76 66 N/A N/A 74 N/A 26 48 63 N/A N/A 31 60 66 70 62 N/A N/A 82 48 127 92 95 85 90 100 69 60 94 87 65 65 37 86 89 96 100 73 55 119 63 212 116 130 N/A 199 139 121 92 129 119 100 100 54 155 129 132 139 84 69 140 113 N/A 210 262 N/A N/A 147 170 174 200 140 160 N/A 102 299 N/A 171 221 144 75 N/A
Venice
Rome
32
8. Luxury for less

The falling cost of luxury
Travellers searching for the best in hotel accommodation were able to benefit from dramatic price falls across the world in 2010. For example, Marrakech saw a big 9% fall for a five-star room to just 90 a night and a 3% fall in the four-star category to 64. The Estonian capital of Tallinn saw four-star prices drop sharply by 13% to just 54 - the cheapest in the report. Five-star accommodation in Venice was 11% cheaper in 2010 than 2009 at 221 a night on average, the biggest percentage fall in this category. Five-star was 7% cheaper in Budapest at 101 and a four-star room was 3% less at just 62. Prague experienced a 3% fall in this category to 63. Copenhagen also posted a 5% drop for four-star but prices were still relatively high at 110. However, those prepared to fly longer distances could really cash in on rooms at the upper end of the luxury spectrum. There was a 17% drop for four-star rooms in the Taiwanese capital of Taipei to 100 and Bangkok saw a 4% fall to 115 for five-star luxury, possibly as a result of the political turmoil affecting the Thai capital. Dubais financial troubles and the increase in capacity saw good four-star deals at 84 a 7% plunge and Cairo registered falls for both four-star (down 15%) and five-star (down 4%) to 78 and 118 respectively. Nearer to home, Dublins mounting economic problems were reflected in price reductions in four star hotels, dropping 6% to 73. Helsinki in Finland also registered a 9% fall for fourstar to 88 and 2% for five-star to 134. Those looking for the high life but wanting to spend substantially less than they did in 2009 should look no further than the Hotels.com HPI guide to Luxury for Less in the table overleaf which shows where in the world four-star and five-star hotel prices have fallen the most.
Marrakech
33
Figure 18 The falling cost of luxury: where prices at top-end hotels fell by the greatest extent between 2009 and 2010
Figure 19 Affordable luxury: 15 destinations with the best-value five-star hotels in 2010
Destination
Star Rating Average price per room per night 2009

120 92 61 247 99 98 97 109 91 78 116 123 120 81 66 66 64
Average % Change price per year on room year per night 2010
100 78 54 221 90 90 88 101 84 73 110 118 115 78 64 63 62
Destination
Warsaw Marrakech Budapest Lisbon Tallinn Prague Berlin Bangkok Pisa Cairo Beijing 75 90 101 101 102 113 115 115 117 118 128
Destination
Melbourne Dublin Las Vegas Istanbul Helsinki Madrid Stockholm Vienna Mumbai Seattle Oslo 129 130 131 133 134 135 140 144 146 147 148
Taipei Cairo Tallinn Venice Guangzhou Marrakech Helsinki Budapest Dubai Dublin Copenhagen Cairo Bangkok Lisbon Marrakech Prague Budapest
-17% -15% -13% -11% -10% -9% -9% -7% -7% -6% -5% -4%
-4% -3% -3% -3% -3%
34
9. Travel habits
Top UK destinations for UK travellers
London was the most popular domestic destination, according to the Hotels.com Hotel Price Index. Manchester and Edinburgh came in at number two and three, swapping places from 2009. Birmingham and Glasgow completed the top-five list of the most popular home destinations for UK travellers. Figure 20 Top UK destinations for UK travellers
Rank 1 2 3 4 5 6 7
London 8 9 10 11 12 13 14 15 16 17 18 19 20
Destination
London Manchester Edinburgh Birmingham Glasgow Liverpool Cardiff Bristol Leeds Brighton Bournemouth Nottingham York Belfast Newcastle-upon-Tyne Blackpool Oxford Sheffield Southampton Aberdeen
35
Top overseas destinations for UK travellers

New York was the most popular overseas destination for UK travellers in 2010, despite rising hotel prices. In fact there are five US cities in the top 20 list, with Las Vegas, San Francisco, Los Angeles and Orlando also featuring. Paris was the second-most popular overseas destination and top European city for UK travellers. However, other top European city-break destinations also feature prominently with Dublin, Amsterdam, Rome, Barcelona and Berlin all in the top 10. Other destinations on the list include the Far East cities of Hong Kong, Bangkok and Singapore. Marrakech was at number 18 in the list with its affordable luxury and relative proximity to the UK.
New York
Figure 21 Top overseas destinations for UK travellers
Rank
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Destination
New York Paris Dublin Las Vegas Amsterdam Rome Barcelona Dubai San Francisco Berlin Prague Los Angeles Hong Kong Orlando Madrid Bangkok Venice Marrakech Budapest Singapore
Country
United States France Ireland United States Netherlands Italy Spain United Arab Emirates United States Germany Czech Republic United States China United States Spain Thailand Italy Morocco Hungary Singapore
36
Top UK destinations for travellers from overseas

The top destinations for visitors to the UK are fairly predictable with London, Edinburgh, Manchester, Liverpool, Glasgow, Birmingham, Belfast and Brighton the eight most visited places. The university city of Oxford, with its limited supply of hotels, proved more popular than rival Cambridge and the university city Bristol made number 10 on the list.
Manchester
Figure 22 Top UK destinations for overseas travellers
Rank 1 2 3 4 5 6 7
8 9 10 11 12 13 14 15 16 17 18 19 20
Destination
London Edinburgh Manchester Liverpool Glasgow Birmingham Belfast Brighton Oxford Bristol Leeds Aberdeen Cardiff Nottingham Newcastle-upon-Tyne Gatwick Airport Cambridge Bath York Bournemouth
37
About Hotels.com
As part of the Expedia group which operates in all major markets, Hotels.com offers more than 130,000 quality hotels, B&Bs and serviced apartments worldwide. If a customer can find the same deal for less on a pre-paid hotel, Hotels.com will match it. Hotels.com benefits from one of the largest hotel contracting teams in the industry negotiating the best rates for its customers, plus there are 1.8m reviews from users who have actually stayed in the hotels to ensure customers make an informed choice when booking. Hotels.com has recently launched its Welcome Rewards customers loyalty programme in the UK, where customers can earn a free night for every ten nights stayed (subject to Welcome Rewards terms and conditions as set out at www. hotels.com). Hotels.com was voted top in the Service and Customer Friendly Website categories by the German Institute of Service Quality in January 2011. Travellers can book online or by contacting one of the multilingual call centres on 020 3027 8146. The company currently operates more than 75 Hotels.com sites around the world including 31 sites in 24 languages across EMEA. The European sites launched in the UK in 2001 and now attract several million unique users every month and thousands of people now book bed nights through Hotels.com every day.
For further information

For more information/press enquiries or spokespeople, please contact:
Alison Couper
+44 (0)20 7019 2360 acouper@hotels.com
Kate Hopcraft
+44 (0)20 7019 2165 khopcraft@hotels.com
Cordy Griffiths
+44 (0)20 7019 2268 cgriffiths@hotels.com
38
2011 Hotels.com, L.P. The Hotel Price Index (HPI), this report and its contents are the copyright of Hotels.com, L.P. All rights reserved. Any reproduction of this report or its contents must acknowledge www.hotels.com as the source.

The Hotel Price Index: Review of Global Hotel Prices: 2010

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The Hotel Price Index: Review of Global Hotel Prices: 2010

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The Hotel Price Index

Review of global hotel prices: 2010

David Roche President of Hotels.com

The Hotel Price Index Review of hotel prices in 2010

The Hotel Price Index Review of hotel prices in 2010

2. Global city destinations

The Hotel Price Index Review of hotel prices in 2010

The Hotel Price Index Review of hotel prices in 2010

1. Global price changes in 2010

European prices stay flat in 2010

Figure 1 HPI quarterly breakdown for Q1 2004 to Q4 2010 globally

130 120 Index Points 110 100 90 80

The Hotel Price Index Review of hotel prices in 2010

140 120 100 80

North America shows small increase

Asia sees overall price falls despite growth in Chinese economy

The Hotel Price Index Review of hotel prices in 2010

When Is A Deal Really A Deal

The Hotel Price Index Review of hotel prices in 2010

2. Price changes in global city destinations

A World Cup double whammy

Middle Eastern promise

The Hotel Price Index Review of hotel prices in 2010

America still appeals despite price rises

Figure 3 Growth in average UK salary compared to HPI 2004 - 2010

Seven years of value for UK travellers

the same level.

HPI Index % Difference: 2004 - 2010

Average UK Salary Growth Rate: 2004 - 2010 (ONS)

The Hotel Price Index Review of hotel prices in 2010

A mixed picture for Europe

Figure 4 Average hotel prices in 2010 compared to 2009

Average price per room per night 2009

Average price per room per night 2010

% Change year on year

The Hotel Price Index Review of hotel prices in 2010

Average price per room per night 2009

Average price per room per night 2010

% Change year on year

Average price per room per night 2009

Average price per room per night 2010

% Change year on year

The Hotel Price Index Review of hotel prices in 2010

Average price per room per night 2009

Average price per room per night 2010

% Change year on year

The Hotel Price Index Review of hotel prices in 2010

50% 40% 30%

-10% -20% -30%

Average price per room per night 2009

Average price per room per night 2010

% Change year on year

Average price per room per night 2009

Average price per room per night 2010

% Change year on year

-17% -17% -16% -15%

Abu Dhabi Osaka Chennai Detroit Phnom Penh Zagreb Sofia

Buenos Aires 90 14%

The Hotel Price Index Review of hotel prices in 2010

Global hotel price changes 2009 - 2010

Muscat 185 15%

Rio De Janeiro 139 28%