The average daily hotel rate paid by Hogg Robinson Group clients during the first half of 2014 declined year over year in most global regions, but ADR in local currency terms increased in 31 of its top 50 markets, according to the travel management company's Interim Hotel Survey, released Tuesday.
"Megacities are continuing to lead the way, resulting in regional trends becoming less meaningful," HRG director of global hotel relations Margaret Bowler said in a statement. "Demand is still growing and is yet to peak, and with occupancy at record levels in the top business destinations, hotels are feeling confident in the strength of the market."
Exchange rates during the first half of this year also have been volatile, with only eight of the top 50 cities in the survey experiencing an ADR increase in terms of the British pound.
Globally, HRG's largest ADR increases in local currency terms were in FIFA World Cup host cities São Paulo (29 percent) and Rio de Janeiro (17 percent), as well as Johannesburg (17 percent), Aberdeen (13 percent) and Moscow (16 percent), which remained the most expensive city in the world for corporate hotels, the report indicated. The largest drops were in Chennai (down 14 percent), Mumbai (down 11 percent) and Zurich (down 7 percent), all of which have had significant supply growth, as well as Frankfurt (down 8 percent) and Munich (down 7 percent), both affected by off-years of large biennial events.
In North America, ADR was about flat in U.S.-dollar terms and down in terms of the British pound. Foul winter weather curbed travel demand from the United Kingdom in such cities as New York, Chicago and Philadelphia and, in turn, curbed ADR growth in those cities. ADR in some cities was up significantly, however, including Houston (7 percent to $238.06), San Francisco (8 percent to $317.04) and Boston (8 percent to $297.60), all of which had strong corporate demand amid little supply growth, according to HRG.
ADR in British pound terms also declined slightly in Europe. Local currency ADR declined in Brussels (down 4 percent) and Vienna (down 4 percent), which has had a "weak corporate market," HRG reported. ADR in Hamburg, meanwhile, increased by 11 percent, due in large part to a major event in the city during the period. Within the United Kingdom, ADR increased in eight of the TMC's top 10 markets, most sharply in Aberdeen (13 percent), driven by the oil and gas industry; and London, Glasgow and Belfast (each up 5 percent).
The Asia/Pacific region was the only one for which HRG reported an increase in ADR in British pound terms. In local currency, the largest ADR increases were in New Delhi (21 percent), which has added supply but also has a strong corporate demand, and in Hyderabad (15 percent), which has had a booming IT industry and little supply growth. Besides Mumbai, Sydney (down 1 percent) was the only major market at which HRG saw ADR decline, due to soft corporate demand and oversupply, the TMC reported.
In the Middle East and North Africa, the largest ADR increases in local currency were in Manama (9 percent) and Istanbul (8 percent), though rates at the latter were down in British pounds due to oversupply, according to HRG. ADR increased by 2 percent in Dubai, though HRG noted a large amount of hotel projects underway there is beginning to slow rate growth.