Hotels.com Study Shows the Average Price of Hotel Rooms Down 14 Percent in the U.S.

| March 05, 2010

Hotels.com, a provider of lodging worldwide, today unveiled its 2009 Hotel Price Index (HPI), an annual report on hotel prices paid around the world. The index shows hotel prices in the U.S. fell 14 percent during the last half of 2009 compared to rates in the same time period in 2008. Hotels.com attributes the falling prices in North America to the economic slowdown and the subsequent reduced demand for rooms.

With 2009 being the year of the travel deal, some cities did see a rise in prices paid as a result of the cause to currency movements, but also with travelers spending more for a little more luxury. The gap in price between 3, 4, and 5 star hotels narrowed in 2009 meaning travelers could spend less to get more. 2010 promises to be another great year for the travel deal and value.

The HPI also found there was a slowdown in price cuts, potentially showing a leveling off of prices for 2010. Prices dropped 16 percent year-over-year in Q1, 17 percent in Q2, 14 percent in Q3, and finally down to 7 percent in Q4. In fact, for the first time since the HPI has been released, US hotel prices are at the level they were in 2004, dramatically falling from the peak prices seen in 2007.

Key Findings:

  • Rounding out the top five favorite domestic destinations with US travelers after Las Vegas are New York, Orlando, Chicago and Los Angeles;
  • The average price of a hotel room globally was 14% cheaper in 2009 than in 2008. In fact, a hotel room was cheaper in 2009 than it was in 2004, when the HPI began. With just a very few, isolated exceptions, worldwide hotel prices dropped substantially for U.S. travelers during 2009.
  • The Big Apple was the most expensive domestic city of those tracked in the global list, with prices averaging $199 during 2009 €" a fall of almost a quarter (24 percent) compared to 2008. BUT visitor numbers to the city rose dramatically. The popularity of NYC soared as domestic and foreign visitors alike made the most of great new promotion.
  • Among the greatest hotel room price falls in 2009 compared to 2008 across major U.S. Cities were: 18 percent in Chicago ($167-137), Las Vegas ($103-$85) and San Diego ($154-$127); 14 percent in Boston ($183-158) and Miami ($162-$140) and 12 percent in Honolulu ($181-$160), LA ($134-119), Orlando ($106-$93) and Phoenix ($115-$101).
  • The most expensive Caribbean and Latin American destinations include the Bahamas, Bermuda, Turks and Caicos and U.S. Virgin Islands. More moderate resort prices were found in Aruba, the Dominican Republic and Jamaica. Average prices for hotels in Mexico and Costa Rica are skewed by the growing prevalence of all-inclusive properties.
  • Top overseas destinations for U.S. travelers include: Toronto, London, Vancouver, Niagara Falls and Paris.
  • The Emirate city of Dubai lost some of its sparkle in 2009 as the economic slowdown affected the city and hotels were forced to lower their rates. Business travel and the convention industry were both affected by the downturn.
  • Beijing, where prices dropped by 29 percent following peaks in 2008 when the city hosted the summer Olympics, saw prices average $109 in 2009 following highs of $152 a year before.

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