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  • 7/29/2019 HRG Hotel Survey January 2013

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    From Hogg Robinson Group

    1

    31 January 2013

    Global room rates show year on year rise, but weak exchangerates disguise price hikes in Latin America

    Hotel room rates in Latin America soared in 2012 as capacity failed to keep pace with demand from

    international business travellers looking to cash in on rapidly emerging economies across the region. The latest

    annual hotel survey from award-winning international corporate services company Hogg Robinson Group

    (HRG) found weak exchange rates continue to shield the majority of international business travellers from

    rapidly rising hotel rates in cities like Rio De Janeiro and Buenos Aires.

    Across the globe, overall rates increased by 1.4%, compared to 1% the previous year. 32 of 55 cities with top

    hotel rates showed a year on year increase in local currency rate in 2012, compared with just 23 of 55 cities in

    2011.

    Key trends include:

    For the ninth consecutive year, Moscow hotels remain the most expensive in the world for business

    travellers. The citys hotel rates increased by 4% over 2012 and remain significantly higher than all other

    cities.

    Rates in global financial centres, including London, New York, Hong Kong and Singapore increased over

    the last year as confidence in the financial sector gradually showed signs of improving. Tokyo continued to

    rebound as reconstruction and recovery efforts drew more corporate activity.

    Brazils major metropolitan cities, Rio de Janeiro and Sao Paulo, showed the highest room rate increases,

    at 19% and 15% respectively in local currency. Latin America is showing strong growth in business travel,

    and of the top five cities with the highest rate increases, three were from the region. However, the rises

    were largely cancelled out when viewed in GBP.

    Indian cities Bangalore, Mumbai and New Delhi have all been impacted by the economic slowdown in

    India. Hyderabad was the exception, with a modest growth during the first half year mainly due to

    increased demand driven by the IT industry. Having seen significant declines in average room rates during 2010 and 2011, rates in Dubai rose 2% and

    are beginning to return to levels not seen since before the Arab Spring. Elsewhere in the Middle East,

    cities are experiencing lower rates as business travellers react to ongoing security concerns.

    New hotel openings in Lagos have somewhat eased pressure on capacity, but average rates remain some

    of the highest in the world. Security remains a major concern for business travellers in Africa, especially in

    Lagos where most corporate visitors use five-star hotels.

    Europe is showing uneven, patchy room rate variances quarter to quarter. Many cities, such as Barcelona

    and Athens, recorded high volatility and unpredictable patterns. Cities in Germany fared better, with

    Frankfurt and Berlin both reporting higher demand leading to increased room rates.

    The US as a whole recorded increased room rates as key cities such as San Francisco and Atlanta hostedstrong convention business. The one exception was Washington, D.C., where rates dropped by 14% as

    corporate demand softened.

    http://www.hrgworldwide.com/http://www.hrgworldwide.com/http://www.hrgworldwide.com/http://www.hrgworldwide.com/http://www.hrgworldwide.com/http://www.hrgworldwide.com/
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    Hotel rates grew significantly in several cities across the UK, including in Belfast where average room rates

    grew 8% and in London, Aberdeen and Liverpool, where average room rates grew by 5%. The London

    hotel market demonstrated resilience in the face of global economic turmoil, aided by the Olympics and

    Jubilee demand. Outside of the Capital, demand in more dependent on the domestic economy.

    The HRG View: Stewart Harvey, Group Commercial Director

    HRGs Hotel Survey shows that regional trends are becoming less relevant as individual cities become bigger

    players in an ever-shrinking world. Though the overall pattern seems to be one of rising average room rates,

    its interesting to see just how varied the picture is within regions, and even within different countries.

    For several years now, weve seen corporates becoming increasingly cost aware and have implemented

    greater control over travel options. This focus on prudency is expected to continue. At HRG we work with our

    clients to help them understand how and when they are booking accommodation in order to overcome

    challenges such as availability and access to the best price.

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    Top 55 cities by hotel rate in GBP

    CityGBP ARR2012

    GBP ARR2011

    GBPARRVAR Local ARR 2012 Local ARR 2011

    LocalARRVAR

    MOSCOW 261.38 260.23 1% RUR 12,831.37 RUR 12,231.75 5%

    LAGOS 227.82 229.72 -1% NGN 56,869.21 NGN 56,823.21 0%

    NEW YORK CITY 220.58 212.98 4% USD 349.55 USD 341.59 2%

    HONG KONG 211.35 207.10 2% HKD 2,598.02 HKD 2,585.46 1%

    ZURICH 207.47 218.59 -5% CHF 308.24 CHF 310.67 -1%

    GENEVA 206.24 221.73 -7% CHF 306.41 CHF 315.12 -3%

    RIO DE JANEIRO 201.32 194.71 3% BRL 622.51 BRL 520.98 19%

    PARIS 196.66 209.46 -6% EUR 242.45 EUR 241.34 1%

    SYDNEY 194.96 192.54 1% AUD 298.36 AUD 299.01 0%

    STOCKHOLM 193.96 202.32 -4% SEK 2,080.52 SEK 2,103.74 -1%

    SAN FRANCISCO 190.82 171.45 11% USD 302.39 USD 274.98 10%

    TOKYO 187.08 166.54 12% JPY 23,660.15 JPY 21,293.71 11%

    OSLO 181.37 188.31 -4% NOK 1,671.22 NOK 1,690.63 -1%

    WASHINGTON 176.11 201.45 -13% USD 279.08 USD 323.10 -14%

    SINGAPORE 170.50 163.54 4% SGD 337.50 SGD 329.50 2%

    FRANKFURT 165.60 170.86 -3% EUR 204.15 EUR 196.87 4%

    LONDON 164.30 157.07 5% GBP 164.30 GBP 157.07 5%

    COPENHAGEN 164.06 166.99 -2% DKK 1,505.39 DKK 1,433.44 5%

    ISTANBUL 162.50 190.74 -15% TRL 463.36 TRL 512.72 -10%

    SAO PAULO 160.55 160.19 0% BRL 496.44 BRL 428.62 16%

    AMSTERDAM 159.43 172.69 -8% EUR 196.54 EUR 198.97 -1%

    ROME 158.25 164.03 -4% EUR 195.09 EUR 189.00 3%

    BASEL 158.13 163.74 -3% CHF 234.93 CHF 232.71 1%

    SEOUL 156.53 144.13 9% KRW 278,518.72 KRW 255,487.34 9%

    MUNICH 154.86 164.60 -6% EUR 190.91 EUR 189.65 1%

    DUBAI 154.18 149.51 3% AED 897.26 AED 880.62 2%

    MILAN 152.04 169.61 -10% EUR 187.44 EUR 195.43 -4%

    ABU DHABI 147.62 164.14 -10% AED 859.08 AED 966.77 -11%

    BRUSSELS 146.29 154.85 -6% EUR 180.35 EUR 178.42 1%

    NAIROBI 142.17 135.31 5% KES 18,746.04 KES 18,966.90 -1%

    DUSSELDORF 136.07 138.60 -2% EUR 167.75 EUR 159.70 5%NEW DELHI 135.72 168.10 -19% INR 11,498.20 INR 12,619.65 -9%

    MUMBAI 135.55 155.52 -13% INR 11,483.67 INR 11,674.94 -2%

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    JOHANNESBURG 133.42 151.20 -12% ZAR 1,733.38 ZAR 1,751.81 -1%

    BEIJING 130.86 122.66 7% CNY 1,307.18 CNY 1,269.88 3%

    SHANGHAI 129.86 134.63 -4% CNY 1,297.17 CNY 1,393.79 -7%

    HOUSTON 128.55 118.87 8% USD 203.71 USD 190.65 7%

    MIAMI 127.59 125.41 2% USD 202.19 USD 201.15 1%

    CAPE TOWN 126.48 146.73 -14% ZAR 1,643.31 ZAR 1,699.93 -3%

    PHILADELPHIA 124.85 118.86 5% USD 197.85 USD 190.63 4%

    BERLIN 121.95 124.69 -2% EUR 150.34 EUR 143.67 5%

    BARCELONA 120.00 128.51 -7% EUR 147.94 EUR 148.07 0%

    MADRID 119.23 125.39 -5% EUR 146.99 EUR 144.48 2%

    ATLANTA 117.53 107.49 9% USD 186.25 USD 172.40 8%

    HAMBURG 113.73 126.10 -10% EUR 140.20 EUR 145.29 -4%

    ABERDEEN 112.29 107.20 5% GBP 112.29 GBP 107.20 5%

    BANGALORE 110.11 141.30 -22% INR 9,328.97 INR 10,607.77 -12%

    HEATHROW 110.04 109.77 0% GBP 110.04 GBP 109.77 0%

    MEXICO CITY 104.09 99.80 4% MXN 2,168.17 MXN 1,985.87 9%

    BUDAPEST 99.99 104.09 -4% HUF 35,610.01 HUF 33,456.74 6%

    DUBLIN 97.94 108.79 -10% EUR 120.74 EUR 125.35 -4%

    MANCHESTER 92.68 94.22 -2% GBP 92.68 GBP 94.22 -2%

    EDINBURGH 89.83 90.73 -1% GBP 89.83 GBP 90.73 -1%

    BELFAST 87.92 81.54 8% GBP 87.92 GBP 81.54 8%

    HYDERABAD 87.89 102.11 -14% INR 7,446.13 INR 7,665.44 -3%

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    Top five highest rate increases

    City Local ARR 2012 Local ARR 2011 Local AAR Variance

    RIO DE JANEIRO BRL 622.51 BRL 520.98 19%

    SAO PAULO BRL 496.44 BRL 428.62 16%

    TOKYO JPY 23,660.15 JPY 21,293.71 11%

    SAN FRANCISCO USD 302.39 USD 274.98 10%

    MEXICO CITY MXN 2,168.17 MXN 1,985.87 9%

    Local currency hotel rates in Rio de Janeiro and Sao Paulo rose by 19% and 16% in 2012 respectively and are

    expected to continue to increase. The Brazilian cities have witnessed a significant upsurge in demand from

    business travellers in 2012, with a lack of new high-end hotels driving prices up. In Sao Paulo, for example,

    the last luxury brand hotel to open was ten years ago.

    Room rates in Tokyo rose by 11% as the economy continued to recover from a series of devastating natural

    disasters. Reconstruction and recovery efforts have led to increased corporate activity in the city, a trend HRG

    believes will continue in 2013.

    Hotels in San Francisco and Mexico City recorded increases of 10% and 9% respectively due to strong business

    demand, underpinned by well-established convention seasons. The lack of new hotel openings in both cities,

    combined with continued corporate de