London Hotel Prices Fall

It has been interesting to monitor Hotel Price Indexes (HPI) over the last few months. Having spoken to a number of GM’s worldwide; during this economic downturn they have been reluctant to lower prices and have instead added value to their stay packages in order to keep their RevPAR high and limit the panic caused to hotel owners, lending institutions, and management companies.

In fact, it was only two months a go that I gave three cheers to the hotel industry for seeing the bigger picture and continuing training throughout this recession. It seemed that hotel GMs had donned their armor plating, had their heads down, and were prepared to battle on into the unknown.

I’m currently based in China, and the financial crisis is yet to hit in such a dramatic way as in the east. Hotel occupancy within 5* hotels based in manufacturing and engineering cities has dropped due to redundancies in the west and the removal of foreign experts on international assignment; however there is no immediate need for pessimism.

Yet, I was not surprised to read on Travel Daily News International that hoteliers across the UK - and especially in London - are continuing to drop hotel room rates. Hotel.com’s HPI shows that London hotel prices were down by 12% to £111 per room on average in the last three months of last year.

The article by Theodore Koumelis continued to say that “Hotels.com saw a 49% increase in the number of searches by Eurozone travellers for London hotels in December 2008 compared to a year earlier, as travellers sought to take advantage of the struggling pound.”

A quick search of hospitality related websites, and the travel section of British newspapers, reveals that the British press has at last turned PRO-BRITAIN in terms of it being a holiday destination. For years it has been difficult to find any positive press, yet now every British city is the new ‘Place to Be Seen This Summer’. But is this tactic working? Web searches from abroad have increased because of the weakness of the pound, but that isn’t going to aid the Brits themselves in any way.

Travel Daily News International says, “UK hotel prices were down by an average of 12% at the end of 2008, with hotels in the north-west seeing some of the biggest price drops. Prices in Blackpool fell by 22% to an average of £79 per room per night, and in Manchester by 19% to £73.”

So you tell me, is the title of Theodore Koumelis’s article, “Boost for Tourism as London Hotel Prices Fall”, an accurate one? Will the UK HPI continue to fall during this economic turmoil, or will the price increase indeed be a boost for tourism?

Click here to read the full article.

Bye for now

Emma

I am still on a search for the best hotel booking system for small to medium sized hotels. If you know of hotel booking software that can beat www.hotelsystems.co.uk for ease of use and functionality then please contact me on eharradine@hotmail.co.uk