Higher global hotel prices for the fifth year in a row - Insights

Higher global hotel prices for the fifth year in a row

HighFiveThe average price paid for a hotel room around the world rose by 3% during 2014 compared with 2013, according to the latest Hotels.com Hotel Price Index (HPI). The overall global economic recovery gathered momentum and consumers became more confident in raising their travel spending. Hotel prices have now experienced five years of steady price rises since they plummeted during the financial collapse of 2008/9.

The global HPI stood at 113 at the end of 2014, 13 points higher than at its launch in 2004 and on a par with its 2008 level but still four points lower than its peak at 117 in 2007.

Johan Svanstrom, President of the Hotels.com brand, said: “Although the Index rose again last year, it is still way behind its peak of seven years ago which is great news for consumers. Each year is unique in the travel industry and 2014 was no exception, bringing its own opportunities and challenges. Global events, such as the Winter Olympic Games and World Cup, predictably attracted travellers to new destinations. Yet unforeseen tragedies, including the Ebola outbreak, the missing Malaysian Airlines flight MH370 and the loss of MH17 left their own mark.”

Of the six regions in the HPI, the Index rose in four, was flat in one and fell in another. With a strong economy and rising Dollar, North America led the way with a rise of 5%, two percentage points better than its 2013 result.

Two regions reported 4% Index growth. The Caribbean achieved a new record, rising to 137, the highest yearly regional Index figure ever reached. This was fuelled by a stronger US Dollar as the Caribbean remained a firm favourite for US travellers. Secondly, Europe and the Middle East showed its fastest rate of growth for seven years, as many countries reported record visitor numbers for the year.

Latin America registered a 2% Index rise. World Cup hosts Brazil exceeded expectations when it came to its hospitality industry and the event was a unique opportunity for the country to showcase some of the top class accommodation and services it has to offer.

The Pacific showed no growth in its Index in 2014 but the continued weakness in the Australian dollar should mean that the region will attract more visitors in 2015.

For Asia, the Index decreased 2%. Over the years, the HPI has shown that Asia has long offered the best value destinations in the world and continues to do so.

Svanstrom continued: “More than 1.1 billion travellers ventured abroad in 2014, up nearly 5% over the previous year[1], with the size of the global domestic travel market estimated to be four to five times this total. Tourism is a fiercely competitive and resilient industry with countries vying to attract valuable visiting travellers by improving infrastructure, expanding hospitality and entertainment options and relaxing visa requirements. Travel opens up both world and minds – so go explore.”

Average percentage price rises in actual prices paid for hotel rooms in 2014

Region

% change

Index

North America

5%

116

Caribbean

4%

137

Europe & the Middle East

4%

108

Latin America

2%

131

Pacific

0%

123

Asia

-2%

104

Global

3%

113

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