Hotel rates in Hong Kong 11th most expensive worldwide

And average room rates in Asia Pac rose by 7%, overtaking Europe’s hotel rate growth.

Hotels around the world have reported rate growth of 4% in the first half of 2011, according to the latest hotel survey from Hogg Robinson Group, the international corporate services company. Of the 50 cities surveyed, 33 reported a year on year increase in hotel rates with strong growth in Asia and an unexpected boost from cities such as Istanbul.

Key trends noted by HRG include:
Singapore jumps seven places up the list of most expensive cities in the world, owing to a 10% increase in average year on year room rate due to high demand from business travellers.

Hong Kong fell out of the top 10 most expensive cities in the world for travellers from the UK. This can be attributed to the GBP strengthening against the HKD earlier this year.

Over two-thirds of the cities surveyed reported hotel rate growth, compared with only one-quarter of cities last year, supporting signs of global recovery and pick up in business travel in recent months.

The strongest performing region was Asia Pacific, where average room rates rose by 7% due to the concentration of hotel development and financial centres including Hong Kong and Singapore.

Stewart Harvey, Group Commercial Director at HRG, says:
"Yet again our survey indicates how important it is for clients to keep control of their hotel programmes and drive volumes to maximise returns. Despite the fact that many large companies have put in place travel restrictions and cost reductions, hotel rates in the majority of cities surveyed increased. Demand is driving the rate."

"We can expect hotel rates to continue to rise as more economies grow and business demand picks up. During this time it is critical for clients looking to minimise travel spend to work with us to negotiate fair hotel rates."

Margaret Bowler, Director Global Hotel Relations at HRG, says:
"The shift from Europe to Asia in hotel rate growth is significant in that it demonstrates changing business priorities. The rates demonstrate that demand has increased for travel to emerging regions as a result of the need to do business and that travellers are willing to pay higher hotel costs during their stay. Outside of Asia, Istanbul in particular has come out with strong rate growth."

Analysis
Top 10 most expensive cities worldwide in local currency: 2011 vs. 2010
Many of the cities with the top ten most expensive average room rates are the same as in 2010, with the exception of Hong Kong and Abu Dhabi, leaving room for new additions Sydney and Istanbul. All of the cities listed in the table above have experienced rate growth in local currency ranging from 2 to 24 percent, with Istanbul, Zurich and Sydney reporting the highest variance.

Top 5 highest / lowest rate variance in GBP: 2011 vs. 2010
With the exception of Istanbul, the cities with the top five highest rate increases compared to last year showed modest growth in local currency. Both Madrid and Paris saw rate growth in GBP and local currency, resulting from a flat euro exchange rate and a strong six months of trading. Like these European cities, Singapore also experienced a 5% year on year increase in local currency due to high demand from business travellers.

Average room rates by region in GBP: 2011 vs. 2010
When measured in GBP, with the exception of Eastern Europe and Africa, all regions saw average room rates increase albeit by a small amount. The strongest performing region was Asia Pacific where average room rates rose by 7%, due to the concentration of hotel development and financial centres including Hong Kong (3% rate decrease) and Singapore (10% rate increase).

Margaret Bowler of HRG said: "Slow and steady is the key theme here, with most regions recording small room rate increases – an indication that business travel is increasing too. The overall picture is one of stability, which should help to reinforce and renew business confidence."

Conclusions
Margaret Bowler, Director Global Hotel Relations at HRG, says:
"The hotel survey for January to July 2011 shows a mixed set of results. In Asia Pacific hotel rates soared as a result of the region's growing economic dominance and the proliferation of financial centres across the region including Hong Kong and Singapore. This contrasted strongly with the Middle East where hotel supply outstripped demand meaning rates fell sharply.

"Overall, our research shows that global hotel rates are increasing and have been exhibiting signs of growth. Looking ahead, we anticipate that hotel rates will continue to rise if the economy improves."

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Photo from jamehand