Hotel Prices Fall by 12 Percent

March 26, 2009 · Filed Under Markets

The average price of a hotel room around the world fell by 12% last year, according to the latest Hotels.com Hotel Price Index.

Hotel prices in December 2008 were more than one tenth lower than they were the year before and room rates were just 1% above their level in January 2004, when the Hotel Price Index was started.

The 12% fall in room rates* was driven by price drops across every continent. Prices in North America fell by the greatest extent, down 12% in Q4 2008 compared to the year before. Prices for hotel rooms in Europe fared little better, dropping 10% during the same period. In the Caribbean and Latin America they fell by 7%, while in Asia, hotel prices held up slightly better, falling just 2%.

This fall in rates in Asia has been the first recorded drop since the introduction of the Hotel Price Index in January 2004. The Hotel.com HPT shows the prices actually paid for hotel rooms instead of indicating advertised room rates. The Index is based on rates that have actually been paid by guests in 68,000 hotels at 12,500 places all over the world.

The latest HPI includes the hotel rates paid from October to December 2008, comparing these data to those of the corresponding period in 2007. David Roche, President of Hotels.com said that prices had slumped in Q4 2008 due to hotels cutting rates worldwide.

The HPI uses a weighted average based on the number of rooms sold in each of the markets that Hotels.com operates in.

The complete Hotel Price Index is available as a PDF format: Hotel Price Index (HPI)