Room Rates at Their Lowest for Five Years

LONDON - The average price of a hotel room around the world fell by 17% in the first six months of 2009, according to the latest Hotel Price Index.

Hotel prices in June 2009 were more than one sixth 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 17% fall in room rates(*) was driven by price drops across every continent.

Prices in Latin America fell by the greatest extent, down 18% in the first half of 2009 compared to the year before. Prices for hotel rooms in North America were down 17%, with rates in Europe faring little better, dropping 16% during the same period.

Asian hotel rates, which had been holding up better than those in the U.S. or Europe, tumbled in the first half of 2009 dropping an average of 17% compared to the same period one year earlier.

Hotel rates in the Caribbean only saw a single digit fall with rates dropping just 2% in the first half of the year.

The Hotels.com HPI tracks the real prices paid per hotel room rather than advertised rates. It is based on prices actually paid by customers at 78,000 hotels across 13,000 locations around the world.

The latest HPI looks at hotel prices for the period January to June 2009, compared to the same period the year before.

"The dampening effect of falling consumer demand has been compounded by sharply increased hotel capacity. In the first half of 2009 an ever larger number of hotel rooms chased a dwindling stream of customers, and this 'double whammy' lowered prices by 17% globally" says David Roche, President, Hotels.com Worldwide who measures the index.

"As demand fell, hoteliers closed floors and cut back both services and prices, creating a market with a distinctly promotional character that is likely to endure for some time."