Hotel room rates down 17% last year: study

THE average hotel room rate (ARR) in Singapore dived 17 per cent year on year to $297 in 2009, according to a study by a corporate travel services firm.

UK-based Hogg Robinson Group’s 2009 Hotel Survey also shows Hong Kong’s ARR sank 18 per cent, as corporate travel was slashed amid the global recession.

Key Asian destinations were hit hard. But Middle Eastern destinations were bolstered by a strong fourth quarter, which led to an overall rise in ARR for 2009 as a whole.

Abu Dhabi (up 17 per cent), Riyadh (11 per cent), Oman (33.7 per cent) and Qatar (31.1 per cent) registered ARR growth due to a limited supply of rooms and revamps of existing hotels.

Worldwide, ARR dipped 3-4 per cent last year.

The five-star sector – especially in the Asia-Pacific region – proved reasonably resilient with a 3.5 per cent decline, which suggests upmarket hoteliers opted for lower occupancy levels, as opposed to slashing prices.

But budget hotels faced stiff competition from three and four-star hotels, which cut their rates amid the slump in travel demand.

Margaret Bowler, HRG’s director of global hotel relations, said: ‘The patterns in this hotel survey suggest the industry has some way to go before rates stabilise in 2010. While the indications are that rates will remain flat in most markets, there are signs of increasing occupancy.’

In fact, according to HRG, Hong Kong was the only one of six major cities – the other five being London, New York, Paris, Frankfurt and Amsterdam – that did not post a growth in ARR for Q4 2009.

‘Corporations should continue to look to renegotiate rates and consolidate hotel programmes,’ said Ms Bowler.

Source : Business Times – 12 Feb 2010