Average corporate hotel rates during the first half of 2013 rose
year over year in most global markets, according to Hogg Robinson Group's
interim hotel survey published on Monday, although many such increases were
well below the levels the travel management company anticipated.
The survey, created from a combination of actual room nights
booked by HRG clients and "industry intelligence," showed average
room rates, measured in British pounds, were up in 35 of 50 top cities
worldwide, including all measured North American cities. Many of those increases,
however, did not rise with market expectations, in many cases because of
increased supply, according to HRG director of global hotel relations Margaret
Bowler. That could change in the coming months, however.
"On the whole, occupancy is increasing faster which,
coupled with continued high demand, means we will be likely to see rates
climbing in certain markets in the second half of the year and beyond,"
Bowler said. "The below-expectation increase in [average room rate] is not
likely to last, and we expect to see further ARR growth into the second half of
the year and an interesting 2014 [request-for-proposals] season."
Moscow remained the city with the most expensive corporate
hotel rates in the world, as it has been for the past 10 years. Lagos, boosted
by the oil and gas industry, is the second-most expensive city, followed by New
York. The rest of the top 10 includes Zurich, Geneva, Rio de Janeiro, Paris,
Sydney, Stockholm and Washington, D.C.
The largest average rate increases in local currency terms
were Munich (34.6 percent), Barcelona (19.1 percent), Tokyo (19 percent),
Pittsburgh (19 percent) and Cape Town (18.8 percent). HRG noted that Pittsburgh
is benefiting from corporate demand in the health, research and steel
industries and has a supply shortage, while Barcelona, Cape Town and Munich all
had solid convention business during the first half of the year.
The largest average rate decreases were in Düsseldorf (down
11.5 percent), Copenhagen (down 8.6 percent), Athens (down 8.3 percent), Abu
Dhabi (down 7.6 percent) and Stockholm (down 7.1 percent). Convention business
in Düsseldorf was weak, and the other cities were affected by oversupply and/or
unfavorable exchange rates, according to HRG.
On a regional basis, hotel rates are growing the strongest
in North America. In particular, average rates in local currency have gone up
in Toronto (16 percent) because of solid convention business coupled with no
hotel openings this year; Chicago (10 percent), because of strong corporate and
convention demand as well as little new supply; and Houston (6 percent), due to
the strength of the oil and energy sectors, according to the report.