Hotel room rates in Latin America soared in 2012 as capacity failed to keep pace with demand from international business travellers looking to cash in on rapidly emerging economies across the region. The latest annual hotel survey from award-winning international corporate services company Hogg Robinson Group (HRG), found weak exchange rates continue to shield the majority of international business travellers from rapidly rising hotel rates in cities like Rio De Janeiro and Buenos Aires.
Across the globe, overall rates increased by 1.4%, compared to 1% the previous year. 32 of 55 cities with top hotel rates showed a year on year increase in local currency rate in 2012, compared with just 23 of 55 cities in 2011.
Trends noted by HRG include:
- For the ninth consecutive year, Moscow hotels remain the most expensive in the world for business travellers. The city’s hotel rates increased by 4% over 2012 and remain significantly higher than all other cities.
- Rates in global financial centres, including London, New York, Hong Kong and Singapore increased over the last year as confidence in the financial sector gradually showed signs of improving. Tokyo continued to rebound as reconstruction and recovery efforts drew more corporate activity.
- Brazil’s major metropolitan cities, Rio de Janeiro and Sao Paulo, showed the highest room rate increases, at 19% and 15% respectively in local currency. Latin America is showing strong growth in business travel, and of the top five cities with the highest rate increases, three were from the region. However, the rises were largely cancelled out when viewed in GBP.
- Indian cities Bangalore, Mumbai and New Delhi have all been impacted by the economic slowdown in India. Hyderabad was the exception, with a modest growth during the first half year mainly due to increased demand driven by the IT industry.
- Having seen significant declines in average room rates during 2010 and 2011, rates in Dubai rose 2% and are beginning to return to levels not seen since before the Arab Spring. Elsewhere in the Middle East, cities are experiencing lower rates as business travellers react to ongoing security concerns.
- New hotel openings in Lagos have somewhat eased pressure on capacity, but average rates remain some of the highest in the world. Security remains a major concern for business travellers in Africa, especially in Lagos where most corporate visitors use five-star hotels.
- Europe is showing uneven, patchy room rate variances quarter to quarter. Many cities, such as Barcelona and Athens, recorded high volatility and unpredictable patterns. Cities in Germany fared better, with Frankfurt and Berlin both reporting higher demand leading to increased room rates.
- The US as a whole recorded increased room rates as key cities such as San Francisco and Atlanta hosted strong convention business. The one exception was Washington, D.C., where rates dropped by 14% as corporate demand softened.
- Hotel rates grew significantly in several cities across the UK, including in Belfast where average room rates grew 8% and in London, Aberdeen and Liverpool, where average room rates grew by 5%. The London hotel market demonstrated resilience in the face of global economic turmoil, aided by the Olympics and Jubilee demand. Outside of the Capital, demand in more dependent on the domestic economy.