Hotels.com was the bearer of more good news regarding price hikes, this time in North America. Following its report earlier this month, the company’s Hotel Price Index (HPI) revealed that North America saw the second fastest rise in average hotel prices in the first half of 2012. The growth represents a 5 percent increase, putting the HPI at 109. Nonetheless, prices remained 10 index points behind their peak in 2007 and were still less expensive than in 2006.
“A new leaf for the hotel sector is on the horizon, as illustrated by the fact that 26 out of 30 cities on Americans’ most preferred domestic destinations list had an average daily rate increase in the first half of 2012,” said Victor Owens, vice president and general manager of Hotels.com North America. “Nevertheless, there are still great values to be had for consumers as properties develop deals and add-ons to help them stand out among their competition.”
The West Coast accounted for a majority of U.S. hotel price increases for the first half of the year, with many cities raising prices between 5 percent and 13 percent. In California, San Francisco elevated prices by nearly $20, from $135 in 2011 to $153 in 2012, while showing an increase of 10 percent. San Diego displayed an average daily rate increase of 6 percent. This year, the city has overtaken Chicago ($158) as the fourth favorite city among U.S. travelers, making it the first California city to break into the top four, joining reigning favorites Las Vegas ($101), New York City ($205) and Orlando ($110), respectively.
With prices on the rise across the U.S., Americans are spending roughly $125 a night on domestic hotel stays, a 5 percent year-over-year increase. This boost in domestic economic spending is not only evidenced by a rise in dollar amount, but also by the increased number of U.S. bookings seen over the past six months.
To stand out in this increasingly competitive sector, hoteliers are revamping and upgrading their properties, or expanding into the luxury segment, which may account for some of the price increases, Hotels.com said. Such luxury travel trends as spa tourism and shopping continue to drive bookings in destinations like New York and Miami, yet Americans remain consistently vigilant about getting the best value for their dollar.
On the global front, Americans looking to take advantage of great deals in some of the world’s top international destinations have no better chance than now, the company said. Prices in such Southern European cities as Athens, Greece (down 11 percent), Toledo, Spain (down 9 percent), and Pisa, Italy (down 8 percent), are decreasing, according to prices paid by North Americans in the first half of this year. The company attributes the lower pricing to drops in local currency.
The UEFA Euro Cup and the ramp-up to the Summer Olympic Games did not create a significant price increase for the region, as Europe and the Middle East as a whole displayed the least amount of growth from a global perspective in the first half of 2012, only increasing by a worldwide average of 1 percent, said Hotels.com. Warsaw, Poland (up 9 percent), was able to reap some benefits of its Euro Cup tourism, while business and group travel in London (up 1 percent) was impacted because of limited inventory and the expected influx of leisure tourism as a result of added attractions for the Summer Games.
The HPI tracks the real prices paid per room by hotels.com customers around the world using a weighted average based on the number of rooms sold in each of the markets that hotels.com operates. The index debuted in 2004, and includes all bookings across the nearly 140,000 properties in more than 60 countries that make up the sample set of hotels from which prices are taken.