HRG unveils 2009 six month hotel survey
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HRG unveils 2009 six month hotel survey
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Category: Worldwide - Industry economy
- Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2009-08-17
Part 1: Overview
The international hotel market is still feeling the effects of the tough economic climate according to the bi-annual hotel survey conducted by Hogg Robinson Group (HRG), the international corporate travel services company. Most regions are experiencing a decline in hotel room rates in local currency terms, with Abu Dhabi the only exception, recording average room rate growth of 5% in local currency. With occupancy levels continuing to fall and rates reduced, corporates continue to consolidate their travel policies and negotiate more favourable corporate deals.
Trends noted by HRG include:
Moscow once again tops the chart as the most expensive destination for corporate travellers. However, for the first time since the city entered the HRG hotel survey in 2005, the rate saw a year on year decline (-14%)
Abu Dhabi is now in second place and is the only city in the survey to have achieved average rate growth of 5% in real terms when measured in local currency
London has seen a 4% decline in average rate in the first six months of 2009, down from the 3% growth over the same period last year. As a result the city has once again failed to make the top 10, dropping from 16th to 23rd place
Average rates increased in the Americas by 15% and rose marginally in Western Europe thanks to the strength of the US Dollar and Euro against the pound. However, when exchange rates are factored in, both regions recorded substantial average rate falls
The top end of the market is holding up well, with the highest average rate increase seen in 5 star hotels (7.7%)
Margaret Bowler, Director of Global Hotel Relations at HRG, says: “The shift in business practices has been substantial and those that adapt well can reap benefits from the unusual trading environment. Hotels are adopting sensible pricing in order to maintain current occupancy levels. Our clients still want to travel and we are helping them find the best and most effective ways to cut costs, identifying alternative travel options to help manage and reduce corporate travel budgets”.
The results show that corporates are travelling smarter as they look to control travel costs and maximise their return on travel expenditure. HRG has witnessed corporates continually reviewing and consolidating their programmes to secure lower hotel rates by delivering increased revenues to their preferred suppliers.
In addition to lower pricing, corporates have been able to negotiate added-value items within their rates such as food and beverage discounts, free Wi-Fi access and reduced parking charges. Significantly, last room availability (LRA) is now considered by many as standard, having only been available at a premium prior to the slowdown in the market. However, as hotels are still managing to achieve high occupancy levels in certain cities and at peak times of the year, HRG continues to advise clients to renegotiate favourable deals on a regular basis, ensuring adequate allocation in high volume locations.
In some countries in the Middle East, demand continues to outstrip supply in many cities and the majority of investment at the top end of the market is supporting continued rate increases.
HRG’s interim survey is based on a combination of industry intelligence, actual room nights booked and rates paid by its UK clients during January to June 2009 compared to the same period in 2008.
The GBP exchange rate is based on the average for the period 1 January to 30 June 2009 versus the average during the same period in 2008 (data source www.oanda.com)
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