Hotel prices around the world fell by 17% to their lowest level for five years in the first half of the year, according to a survey by Hotels.com.

The biggest drops were recorded in some of the most popular European cities for short breaks, with Barcelona the worst performing – down by 14% year-on-year to £92 on average.

Vienna had a 12% fall to £85, Florence by 11% to £92 and Dublin also by 11% to £75 for the first six months of the year.

Rates in both Milan (down 9% to £101) and Madrid (down 5% to £89) were driven by hoteliers cutting their rates to maintain occupancy.

In fact prices rose in just two major Eurozone capitals in the first half of the year, by 2% in Rome and Paris to an average of £110 and £109 respectively.

Similar falls were also recorded for the average cost of a room in the US according to the survey.

Las Vegas saw the sharpest falls – down by 17% year-on-year to just £53 per night. New York prices averaged £139 per night – down by 6% compared to the first six months of 2008.

Worldwide the star performers were Tel Aviv (up by 20%), and Istanbul and Abu Dhabi, both up by 15%.

In the UK hotel prices fell 16% on average. The biggest drops were recorded in Southampton (down by 33% to £57), Bournemouth by 14% to £66 and London by 12% to £101 on average.

David Roche, President, Hotels.com Worldwide, says: “Despite the relative weakness of Sterling to the Euro and the Dollar, the Hotel Price Index has shown that Britons can still enjoy some tremendous bargains abroad.

“Hotel rates are down year on year across most destinations in Europe, and typically expensive places such as New York and Moscow have never been more affordable.”

The HPI tracks the real prices paid per hotel room (rather than advertised rates) for 78,000 hotels across 13,000 locations around the world.

The latest HPI looks at prices from January to June 2009, compared to the same period in 2008.

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