Hotels.com latest price index reveals below-inflation hotel room price rises in UK

Hotels.com latest price index reveals below-inflation hotel room price rises in UK

The average cost of a hotel room in the UK rose just two per cent between 2009 and 2010 to £83 a night fuelling the number of staycation breaks, according to the Hotels.com Hotel Price Index

The percentage increase – below the inflation rate – meant visitors to British hotels paid only £2 more per night than the previous year.

However, the overall picture masks some dramatic price movements across the UK, with many of the major tourist destinations and business centres seeing an above average percentage rise.

Among the 36 British destinations featured in the HPI, 26 saw price rises last year, eight witnessed falls and two stayed the same.

A mixed picture for major UK cities

A number of the UK’s most popular cities saw a strong recovery in 2010.

As well as the ten per cent increase in London, prices went up nine per cent in Oxford, helped by a busy summer and a 20 per cent increase in American visitors.

There was also a five per cent hike in Edinburgh, due to the popularity of attractions such as the festivals and marathon and a growth in the number of flights into the city.

However, the picture was not so rosy for Wales. The average room rate in Cardiff was down six per cent to £76. The Welsh capital saw a decline in prices partly because of fewer showpiece events at the Millennium Stadium compared to 2009 when Take That and U2 performed.

The Ryder Cup also had less effect on prices than in outlying areas. Prices in Swansea slumped 14 per cent to £69.

Norwich sees biggest price rise in the UK

The average hotel room rate in Norwich soared by 38 per cent in 2010 - the biggest leap in the UK. The increase – which took prices from £56 to £78 - stemmed from increased demand from football supporters after Norwich City’s promotion to the Championship and also a concentration of high-end hotel accommodation.

Hotels in the Midlands score with increased football custom

The football effect was also evident in the Midlands.

Cities with teams which have been promoted to the Premier League in recent years saw double-digit price rises for hotel rooms in 2010 after increased demand from supporters.

Prices rose 28 per cent in Stoke to £59 and 27 per cent in Wolverhampton to £46. There was also a six per cnet increase in Birmingham, helped in part by the four-yearly IPEC conference at the NEC.

Lake District benefits from ‘staycation’ trend

The tourist hotspot of the Lake District saw notable price rises with Bowness-on-Windermere reaching an average of £142 a night - up 23 per cent - to take second place in the table of the UK’s most expensive destinations.

Nearby Ambleside - up six per cent to £113 - also made the top five, with hoteliers confident enough of visitors to put up their rates.

St Andrews swings into top spot

Prince William and Kate Middleton’s former university town of St Andrews took the top spot as the most expensive destination in the UK, fuelled in part by hosting the 2010 British Open Golf tournament.

With a 20 per cent jump to £162 per night, the historic location knocked 2009’s costliest destination, Bath, into fourth place, with prices in the spa city rising only two per cent to £113 a night.

A bright future for the IT corridor

Increased corporate demand as companies relaxed travel restrictions on staff sparked double-digit percentage rises in hotels along the M4 corridor – home to the UK’s growing IT industry – with prices in Bracknell up 18 per cent and Reading up 15 per cent.

David Roche, president of Hotels.com, comments: “The overall two per cent rise in UK hotel prices served as a modest boost for British hoteliers in a very competitive market but budget-conscious travellers who stayed at home were also able to find great value with the average room rate at just £83 a night.

“Our 2010 story in the UK reflects the global picture and shows a market in recovery, even if it is one that had, and is likely to continue having, particular twists and turns.

“London, with its ten per cent price increase, 90 per cent occupancy and luxury hotel sector growth is showing strong signs of recovery in the leisure and business sector.

“Many top tourist destinations and business centres also witnessed above average percentage rises.

“However, this does not mean that the day of the deal is over. With guests still paying the same hotel prices as they were six or seven years ago, consumers are experiencing more choice and value for money than ever.”

London was the most popular destination for overseas travellers followed by Edinburgh and Manchester. The capital was also the most popular destination for domestic visitors ahead of Manchester, Edinburgh, Birmingham and Glasgow.