Rising Hotel Prices Show Signs of Global Recovery

Not only are people travelling more, they are spending a little more too. Globally, the average price that travellers paid per night for hotel rooms rose by two per cent, approaching levels not seen since before the economic crisis in 2008/9.

While it's clear that we're not out of the woods yet, the strengthening performance of the global tourism industry is as good an indicator as any that the economy is slowly returning to health. During the first six months of the year, nearly 500 million people travelled internationally. Figures from the World Tourism Organisation point to a five per cent like-for-like increase compared with the first half of 2012 - or to put it another way, an extra 25 million people travelled abroad.

Not only are people travelling more, they are spending a little more too. Globally, the average price that travellers paid per night for hotel rooms rose by two per cent, approaching levels not seen since before the economic crisis in 2008/9, according to the latest Hotels.com Hotel Price Index (HPI).

This trend is echoed in the UK, with ONS figures showing that Brits spent five per cent more when travelling abroad during the first half of 2013, compared to the same period last year. UK travellers paid £108 pernight on average when booking hotels abroad, paying more in over half of the 111 international destinations covered in the HPI report.

In some destinations, Brits faced double-digit price rises. The Mexican hotspot of Cancun topped the list with hotel rates rocketing by 32 per cent to an average of £147 a night. While some of this can be attributed to holiday goers switching to all-inclusive properties, Cancun's growing popularity was also a key factor. With more people wanting to visit, hotels had fewer rooms available which in turn drove up prices.

Brits also paid considerably more in Sharm el Sheikh, spending £104 a night on average - 30 per cent more than during the January - June period of 2012. After a sharp drop in visitors following the Arab Spring uprisings, tourists began to return to the Red Sea destination, helping hotel prices to recover.

With a recent ABTA report suggesting that Brits would rather cut back on leisure activities, clothes, electronic gadgets, home improvement and eating out, than going on holiday, we also saw Brits look to less traditional, yet still desirable destinations to make their money go further. The Baltic capitals of Vilnius and Riga continue to offer good value to UK travellers, with Brits paying an average of £63 for a hotel in Vilnius and just £60 per night in Riga during the first half of 2013.

Asia also proved attractive to UK travellers, as the slowdown of the economies in China and India, coupled with the drop in value of the Yen, made hotel prices more reasonable. Siem Reap, the gateway to Cambodia's Ankor region and Thailand's Chiang Mai, both saw their average hotel prices drop by 15 per cent to eye-catching levels of £45 and £44 respectively. Hanoi was down 13 per cent to £41 but Phnom Penh took the accolade as the destination where the Brits paid the least at £35 per night.

With the UK now enjoying some of its strongest growth since the recession hit, things are looking more positive at home. However, with the global economy still uncertain, it will be interesting to see how international hotel rates and Brits' spending power will fluctuate throughout the rest of this year.

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