Global hotel prices reach eight-year high in 1H13

PETALING JAYA: The average price of a hotel room around the world rose by 2% in the first half of 2013 (1H13), compared with the same period a year ago, according to the latest Hotel Price Index (HPI).

The report noted that average prices are now close to their 2006 levels, before the global financial crisis began. The rise, although relatively small, has maintained a trend of slowly increasing rates, seen since the start of 2010.

Latin America registered its strongest growth for more than two years, with a 7% rise in hotel prices. North America and the Caribbean, buoyed by the strengthening US economy, outperformed the global average with increases of 3% and 5%, respectively.

The slump in the Australian mineral resources industry led to a fall in the number of business travellers, and a weaker rate growth of 1%.

With the eurozone recovering from the recession, hotel prices in Europe and the Middle East remained sluggish, but recorded a 1% gain. president David Roche said, while there is no doubt European hotel prices have been among the most badly affected since the economic fallout in 2008/09, the fact that the eurozone recorded growth in the first two quarters of 2013 is evident that the economic crisis is easing, although it is not yet over.

"Many of the destinations worst hit by the downturn have seen hotel room prices stabilise, with some experiencing healthy rises," he said.

However, Asia was the only region to see a fall in prices by 2% in 1H13.

Individual cities in the region performed well, despite the depreciation in value of the yen and rupee. The fall in the number of inbound visitors to China also contributed to the decline in prices of hotel rooms.

However, outbound travel from China was not impacted by the slowdown in the country's economy, and continued to boom.

"Another phenomenon impacting global hotel room prices is the huge and rapid rise in the number of Chinese international travellers," said Roche, adding that international travel remains an aspiration for many, especially the younger ones who have disposable incomes to travel abroad.

According to the China Tourism Academy 2013 report, China has officially become the world's largest outbound tourism market, with an estimated 83 million overseas trips made by Chinese citizens.

The UN World Tourism Organisation announced that Chinese travellers spent US$102 billion (RM333.5 billion) on international tourism in 2012 — 40% more than in 2011, overtaking the more established tourism markets of Germany and the US.

Set at 100 in 2004, the HPI tracks real prices that hotel guests actually paid, for their accommodation around the world. The index for the first six months of 2013 stood at 111 — eight points lower than its peak in the same period of 2007, and just 11 points higher than during its launch.

This article first appeared in The Edge Financial Daily, on September 13, 2013.

Looking for properties to buy or rent? With >150,000 exclusive listings, including undervalued properties, from vetted Pro Agents, you can now easily find the right property on Malaysia's leading property portal EdgeProp! You can also get free past transacted data and use our proprietary Edge Reference Price tool, to make an informed purchase.