HOTEL room rates in many countries continued to slide in the second quarter as occupancy levels fell again, spelling good news for those trying to stretch their travel budget.
‘Mid-year results have shown the international hotel market is continuing to see average rates fall in many regions,’ says Margaret Bowler, director of global hotel relations at UK-based travel consultancy Hogg Robinson Group (HRG). ‘The latest figures suggest that the industry has some way to go before rates stabilise.’
Globally, average room rates fell at three- and four-star hotels as companies downgraded, which translates to stiffer competition for budget hotels that are struggling to maintain market share.
But five-star hotels raised their room rates an average of 7.7 per cent year-on-year, suggesting luxury hoteliers were willing to sacrifice occupancy.
In Hong Kong, average room rates sank 24 per cent year-on- year to about HK$1,954 (S$365) in Q2, following a 16 per cent decline in Q1 to HK$2,206.
Between January and June, average room rates in Mumbai dropped 23 per cent to £169 (S$403), while Shanghai posted a 17 per cent fall to £141.
However, in Abu Dhabi, average room rates climbed 5 per cent to £253 over the six months, fuelled by demand from the banking and finance sectors.
‘In light of the economic climate and consistently unfavourable exchange rates, more businesses are looking at ways to control travel expenditure,’ says Ms Bowler. ‘We advise clients to take advantage of the current conditions and use these to consolidate travel policies.’
According to HRG, companies are striving to contain travel expenditure and get more bang for their buck by negotiating lower hotel rates from travel agencies, as well as added value such as food and beverage discounts, free wi-fi access and reduced parking charges.
On top of that, last room availability (LRA) – which was previously available at a premium – is now par for the course, thanks to the economic slowdown.
Source : Business Times – 14 Aug 2009
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