Hotel prices rising but still cheaper than in boom
DESPITE a hike in prices last year, it is still cheaper to stay in a top hotel than it was during the boom.
Prices peaked in 2007; today they hover around 2005 levels. But things are definitely on the up for hoteliers.
According to bookings site Hotels.com the average price of a room increased by 3pc globally in 2012, following a 4pc hike in 2011.
Unfortunately for the Irish hospitality industry, prices in this country bucked the international trend and fell by 1pc last year.
The decline mirrored small falls across Europe, which along with the Middle East was one of the only regions that experienced a drop in prices.
Hoteliers in southern parts of the eurozone, Greece, Italy and Turkey, felt this most acutely.
Rates actually rose in Germany, Norway and Sweden compared to 2011, mirroring those countries' robust economies and spending power.
Hotel prices are very closely related to and thus paint a fair picture of the global economy.
Spending on leisure activities such as holidays tends to be one of the first things that consumers cut back when money in short.
Reduced demand from the business sector also hurts the hotel industry, since travel is one of the first things that companies axe when seeking to reduce spending.
Significant one-off events such as major conferences or tournaments can often have a more pronounced effect on the sector than any other industry.
The London Olympics meant that UK prices were particularly volatile in 2012, with hotel rates inevitably spiking at the start of the year.
Still, once the Olympic organising committee started releasing the blocks of rooms they were holding and hoteliers realised demand was not going to be as strong as hoped, prices fell significantly.
Of all regions in 2012, room rates jumped the most in the US and Canada. This was a result of an influx of visitors, as airlines upgraded their terminals and added more jets capable of long-distance flights.
Smoother visa procedures also helped. Price rises might have been higher but for the destruction caused by Hurricane Sandy in October 2012, which resulted in the cancellation of 9,000 flights.
In Asia prices were up 2pc, buoyed by a bounce-back in tourism when compared to 2011 and the devastation of the Japanese tsunami but pared back by the Indian rupee's fall in value and political sensitivity in the East China Sea.
Price stability differs also greatly depending on the standard of the hotel. Cheaper hotels saw rates hold steady or improve but rooms in four and five-star hotels saw a significant drop in prices in 2012.
Vancouver saw the biggest fall, with four and five-star hotel room prices down by almost a quarter to an average €223. Five-star accommodation in the Big Apple slumped by 7pc, to a still-impressive €416 average.
Happily for Dublin hoteliers, this country's capital bucked the trend. The average four-star hotel room in Dublin cost €94 while a five-star hotel room cost €177 last year.