Hotel Rates Recovering Slower Than Anticipated
A new study has found that although hotel rates are recovering they are doing so at lower levels than the market anticipated. The study, conducted by?Hogg Robinson Group?(HRG) an international corporate services company, said that hotel rates are behind by 4 percent to 5 percent of predictions.
Although average room rates have increased in 35 top international cities, HRG said there is formidable differences in performance. That said, North America is weighing in as the strongest performer, particularly in such cities as New York, Chicago and Toronto.
For its part, the Middle East and West Africa have been impacted what HRG referred to as ?general uncertainty and increased capacity.?
?The early sign of recovery in hotel prices is encouraging, what is a surprise however is that in certain key cities the rates are not as high as the market had expected ? in many cities this is attributed to new supply, said Margaret Bowler, director, global hotel relations at HRG, in a prepared statement. ?On the whole occupancy is increasing faster which, coupled with continued high demand, means we will be likely to see rates climbing in certain markets in the second half of the year and beyond.?
For the 10th?consecutive year, Moscow remains the most expensive city for business travelers with an ARR of $411. Other findings include the fact that robust growth in the oil and gas industries has helped Lagos in maintaining its spot as the second most expensive city. The industries have also helped increase the ARRs of Houston?s and Aberdeen.
Four new destinations have been added to the top city list, including Toronto (26th), Athens (34th), Pittsburgh (46th) and Chennai, India (48th). In the U.K., only three cities ? London, Aberdeen and Edinburgh ? recorded increases in ARR. India is also experiencing a growth burst, particularly in cities that are experiencing growth thanks to the outsourced IT sector and SME business.