Mumbai: It’s good news or bad news —depending on whether you are an innkeeper or a thirsty traveller.
Also See Prices Decline (PDF)
The average global price of a hotel room dropped 12% in the last quarter of 2008, compared with the same period in 2007. This was the main takeaway from the latest Hotel Price Index from Hotels.com, an online hotel bookings website. It is part of US-based travel firm Expedia, which offers more than 99,000 hotel rooms worldwide.
Mumbai had the biggest fall in room rates because of the 26/11 terrorist attack in the city. Room rates here fell 41%.
The average price per room for an overnight stay during October to December in 2008 in Mumbai was $186, against $318 in the corresponding period in 2007, according to Hotels.com.
New Delhi featured in the list of Asian cities recording moderate drops in hotel prices, with a 4% decline, along with Bangkok (3%), Kuala Lumpur (5%) and Tokyo (6%).
According to the Hotel Price Index, hotel prices in North America fell by the greatest extent—down 12%—with Europe dropping 10% in Q4 2008 compared with the year before. On average hotel prices today are only 1% higher than they were five years ago, it said.
The Asia-Pacific region recorded its first year-on-year drop in hotel room prices since 2004.
This drop was comparatively small—only 2%. But there were sharp drops in many large Asian cities including Hong Kong, Singapore, Beijing and Mumbai.
Guy Godet, general manager, JW Marriott Hotel in Mumbai, told Mint that the average room rates of hotels in India has gone down by 15% and the room occupancy down by 30% in the backdrop of economic slowdown. Marriott International Inc owns JW Marriott Hotel.
David Roche, president, Hotels.com Worldwide, in a statement said: “The latest Hotel Price Index shows the economic downturn is now affecting hotel prices on all continents. Our report shows that hoteliers around the world are being forced to cut rates to fill their rooms.”
“The good news is that there are many bargains to be had for travellers. This year really will be the ‘year of the deal’,” he said.
Local hoteliers endorse this view. “We are now offering various package deals and value added offerings to our guests. We are adding more privileges to the deals while trying not to dilute base price,” said Godet of JW Marriot.
“We are also extending lot more benefits to our customers as alternative option to lowering room tariff. Once you decrease the room tariff, it is tough to restore it,” said a senior executive with the Leela Palaces Hotels and Resorts. He did not want to be identified.
Roche said destinations traditionally considered too expensive for many budget-conscious travellers are now more attractive. Hotel prices are down in many popular cities such as London, down by 24%, New York 22% and Barcelona, which is down 21%, making it an ideal time to visit these favoured destinations.
“...The indications are that 2009 will continue to be a good year for travellers,” Roche added.