Hotel prices in Asia drop; Singapore most expensive in Asia Pacific

According to the latest Hotels.com Hotel Price Index, global hotel prices increased by 4% on average in 2011 over 2010, continuing the process of steady recovery from the lows of 2008, albeit at a distinct walking pace.

Prices fell 2% in Asia year-on-year but rose in all other areas, including 8% in the Pacific, 5% in North America, 4% in Latin America, 3% in the Caribbean and 2% in Europe and the Middle East.

David Roche, President of Hotels.com, said, “The hotel sector is a good barometer for the global economy as a whole. Prices are up because demand for rooms is on the rise – a sign of higher levels of business and consumer spending. Local conditions, influenced last year by political uprisings, natural disasters and currency fluctuations, do have a major impact on prices but the momentum is there and the market is growing.”

There was a mixed picture in China with Beijing up 5% to HK$742 and Hangzhou up 25% to HK$873. However, Shanghai posted the steepest decline in prices down 23% to HK$682. This was in large part caused by an oversupply of rooms from new construction projects and falling demand after the World Expo in 2010. Guangzhou was also down 15% to HK$662 and Shenzhen down 7% to HK$695.

Reduced occupancy and falling demand in Japan after the March 2011 earthquake drove hotel rates downward. The earthquake also had a knock-on effect in other parts of the region as fewer Japanese executives and tourists travelled abroad. Japanese destinations were forced to discount following the earthquake in March, for example Sapporo was down 11% to HK$769 and Kyoto down 5% to HK$1,143. However, the average room rate in Tokyo remained unchanged at HK$1,115.

Also, popular Thai destinations did not fare as well because of the extensive flooding that spread throughout the country’s northern and central regions between July and December 2011.

On the other hand, the average hotel room price in Hong Kong continued to soar by 46% to HK$1,270.

Despite the drop in hotel prices across Asia Pacific, Singapore remains the most expensive Asian country for hotel rooms. The city-state ranked in sixth place among traditionally expensive countries like the UK, Switzerland, Italy, Denmark and France.

Singapore was also ranked second most expensive city for five star hotels, with London taking the top spot and Dubai coming in third with Hong Kong in fourth.

Johan Svanstrom, Managing Director, Asia Pacific for Hotels.com, said, “The hotel industry in Singapore has developed tremendously in recent years. For one, the hotel room inventory has really grown with numerous openings of prestigious hotels targeted at affluent, business travellers. On top of being a business hub and a stopover for long-haul travellers, the country has also invested in upscale attractions such as the integrated resorts that have proved to be a great hit with tourists – these make Singapore the perfect vacation option for luxury travel.”

The report also showed that Singaporeans paid the second lowest amount for hotels on average while abroad but the third highest amount on hotels at home, spending an average Sin$175 on rooms overseas but Sin$239 on their own soil.

 “With their busy schedules, Singaporeans do not always have time for trips abroad; some prefer to enjoy higher quality for less with ‘staycations’ at home. The number of new luxury hotels have definitely provided Singaporeans with many options for a short but affordable luxurious getaway,” Johan added.