11 September, 2014

‘Megacities’ top hotel room rate growth

'Megacities’ hotel room rates have continued to grow in the first six months of 2014, according to the latest Hotel Survey from international corporate services company, Hogg Robinson Group (HRG).

The Asia-Pacific hotel market is the only region globally to experience a year-on-year growth rate in excess of the previous year’s figures.

Out of the top 50 cities, 31 saw an increase in local Average Room Rate (ARR). Highlighting the increasing importance of the growth ‘Megacities’ over regional trends, occupancy in key business destinations remains at record levels and is continuing to grow.

Moscow retains the top spot in the Hotel Survey for the tenth consecutive year with a 16.3% rise in the local ARR, bringing it up to a hefty AU$445 a night.

Key markets in the oil and gas sector, such as Aberdeen and Houston, continue to benefit from a booming industry coupled with a lack of new openings.

The recovery in the Financial Services sector continues apace with seven of the top ten global financial centres experiencing local ARR increases, with two remaining static and just one falling back slightly.

The UK experienced a very positive first six months of 2014 with ARR increasing in eight of the top ten cities, translating considerably well compared to the same period last year where only three cities saw ARR increases.

Increased demand as a result of the FIFA World Cup coupled with significant exchange rate movement meant that Sao Paulo and Rio de Janeiro topped the survey for increases in local ARR at 29% and 17% respectively.

North America witnessed mixed results with the severe weather in Q1 pegging back demand in markets such as New York, Philadelphia and Chicago. However, Boston saw continued corporate demand and lack of openings drive up ARR by 8% while San Francisco is still experiencing demand outstripping supply, a situation that is likely to continue for quite some time.

Global Hotel Relations at HRG director, Margaret Bowler, said “our Interim Hotel Survey highlights once again that Megacities are continuing to lead the way, resulting in regional trends becoming increasingly less meaningful

“The balance between price, location, quality and availability will drive the market throughout 2014 and that continues to be the case; however there are still opportunities for clients to secure savings if they are open minded. By consolidating their programme and by building meaningful, long-term working relationships with hotel groups, clients will be better placed to navigate the sometimes volatile market place,” Bowler added.

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