The surge of corporate travel to the world’s new economic powerhouses has sent hotel prices soaring for British business executives, according to the latest Hotels.com Hotel Price Index™ (HPI®). In the first half of 2011, the soaring demand for accommodation has led to average room rates increasing in the emerging markets of the BRIC nations: Brazil (up 7% to £132), Russia (up 11% to £141), India (up 2% to £85) and China (up 4% to £92).
At the same time, major business hub cities have also witnessed rocketing hotel rates with Sao Paulo – exacerbated by a lack of new hotels – up 27% to £123, Sydney up 22% to £110, Hong Kong up 17% to £110, Singapore and Moscow up 11% to £130 and £157 respectively and Mumbai up 9% to £114.
The findings are consistent with the Global Business Travel Association’s projection that worldwide business travel spending will rise 9.2% in 2011.
Alison Couper, of Hotels.com, said: “At a time of economic turmoil in the developed world, it’s important to remember that some markets are still doing very well and outstripping the traditional powerhouses of the global economy.
“Corporate travel to the booming BRIC nations has undoubtedly helped boost hotel occupancy and prices with an overall 3% rise in the average price of a room in the first six months of the year.
“It’s fair to say that hotel rates are serving as a good barometer of the growing importance and popularity of cities in these rapidly-developing countries to the global business community.”
Other countries which have held their own in the difficult economic environment have also experienced hotel price rises because of robust demand from business travellers with Australia up 15% to £102 and Sweden up 11% to £112.
The Hotels.com survey found that convention travel has staged a revival – filling hotels and prompting recovery – with increased prices in major conference and tradeshow cities in North America, including Boston (up 10% to £134), San Francisco and Chicago (both up 9% to £103) and New York (up 6% to £160).
However, as demand for rooms has increased, so has the supply and this has acted as a brake on prices in some economic hotspots. There was a 19% fall in Shanghai as the city’s hoteliers re-adjusted after the World Expo event last year which saw the opening of a string of new hotels. Furthermore, according to the July 2011 STR Global Construction Pipeline Report, there are still nearly 6,000 new hotel projects in development around the world, adding more than 900,000 hotel rooms.
Alison Couper, of Hotels.com, said: “Monitoring hotel development can help explain shifts in prices, especially in cities where business travel continues to rebound.”
