28 January 2009

Business people cutting hotel stays

The average length of corporate hotel stays fell notably from 1.9 to 1.5 nights in 2008, according to the latest survey by HRG.

"Businesses are still travelling, but they are changing their travel patterns, opting for shorter business trips and in some cases opting for lower star ratings than previously to minimise expenditure and ensure maximum value for their spend," said director global hotel relations Margaret Bowler.

"While average hotel rates rose across the board in 2008, rates noticeably levelled off and even fell in some cities towards the latter part of the year.

"There are still pockets of growth and in key markets around the worlds where demand continues to outstrip supply rates are likely to continue to increase into 2009, albeit at a slower rate than seen over recent years.

"However, there is no denying that these are challenging times and with them, we are seeing a noticeable shift in business practices."

She said although average hotel rates are flat or falling in many locations, contrary to what many may expect, hotels are not slashing prices.

"Instead, the majority of hotels are adopting a sensible long-term strategy to offer value rather than significant price cuts to customers in order to maintain their share of the market," she explained.

"Occupancy levels haven’t fallen to the same levels as we saw post 9/11. However, if they continue to fall, as they are in certain markets, rate strategies will be interesting to watch."

Bowler said current market conditions are prompting a changing dynamic in the industry, which is creating opportunities to both hotels and corporates.

"Over recent years we have seen hotels deny corporates their negotiated rates during peak periods in favour of more lucrative sales. With a greater focus now on long-term stable relationships, hotels are opening up availability on corporate rates once more."

The list below shows the top 10 most expensive cities worldwide, listing the average room rate (in sterling) in 2008 followed by the increase, or decrease, over 2007.

MOSCOW £303.35 22%
NEW YORK CITY £222.97 15%
PARIS £200.16 16%
MUMBAI £196.38 21%
ABU DHABI £191.47 36%
MILAN £190.72 15%
GENEVA £183.24 26%
DUBAI £182.94 -2%
STOCKHOLM £178.64 11%
ZURICH £178.23 19%

By Bev Fearis