Latest data from global hotel solutions provider HRS has revealed that major cities across the UK, including London, have seen a decline in average hotel room rates when looking at Q2 2016 compared with Q2 2015. Having held the top spot in Europe for the last few years, London has been knocked off its perch as the most expensive capital to stay in, with rates showing a seven per cent decline on the same period last year.
However, data for the majority of capitals in Europe and internationally showed that the average cost of a hotel room per night is on the up, bar a small handful of destinations.
Whilst London continues to have the most expensive hotel rooms in the UK at an average room rate of £148, Manchester takes second place with a room per night costing £100 – two per cent lower than the same period last year. Taking third place is Bristol, offering rooms at £98 on average – a 10 per cent drop compared with Q2 2016.
Meanwhile, despite the excitement surrounding the Games in Rio, the cities that experienced the largest decrease in hotel room rates are Sao Paulo and Rio de Janerio. Rates are likely to have been impacted by people being deterred from travelling to South America due to the risks associated with the Zika Virus, which has been extensively covered in the media.
Jon West, Managing Director of HRS for the UK and Ireland, commented: “It will be interesting to monitor how rates are affected during the Games this summer for Rio to see if these prices rise as hoteliers look to maximise spend by sports fans visiting during this time. The Q3 2016 results will certainly be telling.”
Talking about the UK outlook, Jon continued: “With UK room rates dropping across the board in Q2 2016 by an average of seven per cent against the same period the previous year, this is certainly something to keep an eye on but it could present an opportunity for UK tourism and the business travel industry. For business travellers and holidaymakers alike, this should make the UK more appealing as a place to stay as for many years now it’s been renowned for being so expensive.”
Looking at Europe, Dublin overtook London with average hotel room rates at £163 – a whopping 70 per cent rise and £15 more expensive than London. However, it was Oslo that stole the top spot as the most expensive European capital to stay in at £186 per night – also a massive 70 per cent increase on the same period last year, and nearly £40 more expensive than London.
Jon said: “Dublin is certainly one to watch at the moment and has recovered significantly following its recent economic crisis. The city is increasingly seen as an ideal business destination and has already attracted major global firms, including Google, Facebook, Amazon and Microsoft.”
When comparing data from Q2 in 2016 with the same period in 2015, hotel prices have fared better across Europe with almost 50 per cent of cities recording an increase. The top European destinations that saw the highest percentage increase for average hotel room rates include Oslo (70 per cent), Stockholm (15 per cent) and Helsinki (14 per cent).
Talking about room rate development in these Scandinavian countries, Jon said: “It is possible that the demand has gone up for hotels in these cities as they are considered safer places to travel to than mainland Europe. With recent terrorist events and the uncertainty surrounding Brexit, businesses could be looking for alternative places to stay.”
Meanwhile, Istanbul has suffered the most with the highest decrease in hotel room rates, showing an almost 20 per cent decline and an average night’s stay costing just £65. Moscow and Milan aren’t far behind with average rates dropping 16 per cent and 14 per cent respectively.
Finally looking at the international scene, hotel room rates increased across major capital cities globally compared to Q2 2015, reflecting an overall uplift across the global marketplace despite recent terrorist events heightening safety concerns.
Unsurprisingly, New York retains its position as the most expensive city in the world with an average room per night setting the purse strings back by £204. However, New York could be one to watch with rates for the Big Apple having dropped 12 per cent on last year’s Q2. San Francisco continues to record strong rates with an average room costing travellers £189, and Tokyo coming in third with hotel owners setting their rates at £156 per night.
Buenos Aires and Cape Town recorded the highest increases in average room rates for hotel stays. Rates in Buenos Aires have spiked by 20 per cent to £98 per night, whilst travellers to Cape Town will be set back £101 – 15 per cent higher than Q2 in 2015.
Despite price hikes globally, there are still bargains to be enjoyed, Jon added: “Those travelling on a budget should still look to Asia for its keenly priced capitals. In fact, Kuala Lumpur cost just £56 per night in Q2 2016, meaning travellers could book nearly four nights in Malaysia’s capital compared with just one night’s stay in New York.”