UK hotel prices continue to fall

Average hotel room rates in major UK cities including Cardiff, Edinburgh and Bristol fell by up to 20% in the third quarter compared with the same period last year.

Data from hotel solutions provider HRS shows that Cardiff suffered the greatest drop while in Edinburgh rates fell by 17%, they were down 16% in Bristol and 15% in Liverpool.

In London, prices fell 14% but at an average nightly rate of £153 it was still the most expensive place to stay in the UK.

Andy Besent, managing director of HRS (UK and Ireland), said: "Our data shows that rates have dropped in the last two quarters across major cities in the UK compared with the same period in 2015.

"Last quarter’s findings showed that Q2 rates had fallen on average by 7%, but for Q3 rates have fallen even further by an average of nearly 14%.

"It’s too early to say whether or not this is due to the outcome of the Brexit vote, but we are watching to see if this pattern continues.

"Whilst it’s no doubt concerning for the hotel industry, the fall in prices should at least make the UK a more attractive and cost effective destination for foreign business and leisure travellers in the months to come."

Elsewhere in Europe, the majority of key cities saw a steady rate rise in Q3 2016 against the same period in 2015.

Following the 14% drop in London prices, it’s no longer the most expensive place to stay, having been leapfrogged by Zurich where the average is £160 a night. In third place, Copenhagen charges an average of £152.

Istanbul was the cheapest place to stay in Europe, with room rates falling significantly by 28% down to £63 per night.

Meanwhile, rates also fell in Milan by 13% to £101, Moscow by 10% to £75, Paris by 5% to £115, Brussels by 5% to £102 and Amsterdam by 4% to £117.

North America became the most expensive region to stay in overall, with New York rates averaging £229 per night in Q3 2016, San Francisco at £222 and Chicago at £167.

Conversely, as with Q2 2016, some of South America’s major cities experienced significant falls in hotel room rates. This included Sao Paulo and Rio de Janeiro which saw the most marked decrease with room rates falling by 21% and 23% respectively. Mexico City also saw room rates slide by 15% down to £95. Only Buenos Aires saw a slight rise of 7% to an average of £105 per night.

Kuala Lumpur was the major city with the lowest room rates overall, charging an average nightly rate of £59 and Bangkok had rooms averaging £63 per night.

"Average room rates are generally holding strong in Europe and internationally, especially when comparing these figures against the UK’s performance," added Besent.

"Looking at average room rates for locations where acts of terrorism have taken place over the last year such as Paris and Brussels, the drops have been relatively marginal which shows resilience from these important business hubs. The only exception is Istanbul which has certainly taken quite a knock."

"However, we are keeping an eye on the impact that the threat of the Zika virus may be having on prices in South America in particular and will be monitoring to see if this is an emerging trend in the coming months across other locations where it may become more prevalent.

"From media reports, we know that the threat of Zika may have deterred some people from going to Brazil for the Olympics and the Paralympics, so it could be that hoteliers chose to lower their rates during Q2 and Q3 2016 to try and make it more enticing."