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Travel portal Expedia says declines of hotel room rates started to slow in the fourth quarter as cheaper currencies attracted more travellers in some global regions.
Hotel room rates fell 7% in the three months through December compared with a full-year drop of 14%, Expedia’s Hotels.com said in its report.
The weakness of the British pound attracted a record number of travellers from the Middle East to London and encouraged Britons to spend their vacations in their home country, Expedia said. The 3.9% visitor decline in New York was lower than expected as the US currency was cheaper than in the previous year.
“Most of the price declines are behind us. Prices probably will not recover significantly this year in most regions and will continue to fall in Asia, the Middle East and Latin America,” said David Roche, president, Hotels.com.
Hotel room rates last year were on 2003’s level, the survey shows. The study is based on hotel transactions conducted via the Hotels.com Web site during the period, so the decline in the index may represent consumers switching to cheaper hotel rooms as well as hotels reducing their room rates, Roche said.
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Room Rates
Declines were the biggest in Moscow where rooms cost 27% less than in 2008. Prices dropped 10% in Dubai, 12% in Beijing and 11% in Vienna, while advancing 3% in Monaco, which has replaced the Russian capital as most expensive destination, with an average room rate of 172 UK pounds (US$ 256).
“Five star hotels were the most affected during last year’s decline,” Roche said. Chains and private hoteliers are reacting to the global fall in demand with more promotional offers such as three nights for the price of two, he added. While 30% of all bookings through Hotel.com were discounted in the first half of 2008, that figure rose to more than 50% in the middle of last year.
While business travel declined last year, leisure and tourism was the least affected hotel category, Roche said. Hoteliers should try to attract more business travelers from countries that are suffering less from the global crisis and give private customers “value adds” such as shopping coupons or free extra nights, the executive said.
Still hotel capacity is being added in many regions. “Especially Dubai has a lot of overhang,” Roche said. India, which has not enough two and three-star hotels, has just started to build up the medium range, according to Roche.
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