HRG: Economic balance of power moving from West to East

SINGAPORE – The Asia-Pacific hotel market suffered a turbulent 2009 due to the global economic downturn, according to the annual hotel survey released by HRG, the international corporate travel services company. 



However, the survey also illustrates the different pace of recovery across economies and highlights long term global economic trends that have been accelerated by the global recession – with the economic ‘balance of power’ shifting from West to East

Across the world, all regions reported falls in average room rates in local currency terms, with double digit falls seen in Singapore, Hong Kong and Dubai.

HRG’s data also reveals that Hong Kong was the only one out of six key global cities surveyed which failed to achieve average room rate growth in the final quarter of 2009.

Trends noted by HRG include: 



Top 10 most expensive cities worldwide: 2009 vs 2008

– For the fifth consecutive year, Moscow has emerged as the most expensive destination worldwide, despite posting a five percent fall in average room rate in local currency terms.


– The Middle East region again experienced weaker rate falls than other regions. Abu Dhabi moved up from 5th to 2nd place in the rankings, only seeing a one percent decrease in average room rate, and Manama (Bahrain) shot up to fifth place, reflecting demand outstripping supply in the region.


– Mumbai fell from 4th in 2008 to 27th in 2009, a key indicator that business confidence had suffered following the terrorist attacks in November 2008. 


Key global focus cities: 2009 vs 2008

– In 2009, major Asian business destinations like Singapore and Hong Kong recorded double digit falls in average room rates in local currency terms. Rates decreased by 17 percent in Singapore and 18 percent in Hong Kong compared to 2008.


– Dubai saw a 21 percent decrease in 2009, with high quarterly fluctuations in rates evident of the country’s current over supply of hotels rooms.

Global hotel star ratings comparison of 2008 vs 2009

The five star sector fared surprisingly well in 2009, experiencing a relatively low average rate decline of 3.5 percent compared to 2008, as top hoteliers proved willing to sacrifice a degree of occupancy in order to maintain rate integrity.


This sector has also remained somewhat stable in the MEWA and Asia Pacific regions, where such properties are prevalent and increasing.


The budget hotel sector remained static year on year facing increasing competition from the 3 and 4 star market.

Margaret Bowler, director global hotel relations at HRG, says: “It is clearly a tough picture for the hotel industry in 2009 but we did see it coming and the changing market has created opportunities for both corporate travellers and hoteliers. 



“Previously hotels could deny bookers access to corporate rates in favour of more lucrative options.

“In 2009, the playing field levelled and this trend reversed as occupancy levels decreased and corporates gained greater access to negotiated rates.

“Hoteliers have tried to maintain rates and therefore corporate travellers have increasingly been able to secure value-added services as part of their negotiated rates such as internet access, parking, and breakfast.”