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Australian hotel prices rise well above global average

Profile Photo By: H L
September 13, 2011

Australian hotel prices rise well above global average

Surging hotel price growth catapults Melbourne and Sydney into the world?s Top 10 list for biggest hotel price rises

  • Australian hotel prices rise 9% on average in first half of 2011; significantly more than 3% global average
  • Melbourne and Sydney both in Top 10 highest percentage price rises globally
  • Strong Australian economic fundamentals bolster corporate travel
  • Prices fall significantly in crisis-hit Japanese cities and Christchurch

Both Melbourne and Sydney have featured in the Top 10 list of cities for the highest hotel price rises worldwide in the first half of 2011, according to the latest Hotel Price Index? (HPI?).

Outstripping the average global rise of just 3%, average hotel prices in Melbourne and Sydney were up 11% and 10% year-on-year respectively. Canberra bucked the national trend falling 8% to $177 but was still ahead of Brisbane, Sydney and Melbourne ($174, $172, $154 respectively).

?In the first half of this year, Melbourne had the fourth largest increase in hotel prices in the world while Sydney had the sixth largest,? Johan Svanstrom, Managing Director, Asia Pacific for, said.

?There is a complex interplay of factors driving the price increases in primary hotel markets in Australia including the relatively robust performance of the economy, solid demand from Asian leisure travellers and a strong corporate and conference market.

?The strength of the in-bound Asian market was offset by a decline in travellers from Europe and the US, caused by the rising cost of long-haul flights due to oil price inflation, and the decline in value of their currencies against the Aussie dollar.?

The HPI is based on bookings made on sites around the world and tracks the real prices paid per hotel room (rather than advertised rates) for about 125,000 properties across more than 19,000 locations. The latest HPI looks at prices in the first half of 2011 compared with the same period last year.

Australian city breakdown

Destination Average price per room per night H1 2011 % change year on year
Canberra 177 -8%
Perth 174 13%
Brisbane 174 27%
Sydney 172 10%
Port Douglas 172 5%
Melbourne 154 11%
Hobart 147 3%
Adelaide 145 2%
Gold Coast 144 17%
Cairns 117 -10%

Global overview

Overall, the global index found that hotel prices around the world have experienced pronounced volatility as a result of political unrest and natural disasters in the first half of 2011, compared with the same period last year.

While the average price of a room around the world rose by 3%, this masked some steep rises and falls in regions affected by the historic events in the first six months of the year.

Prices fell 6% in Asia Pacific year-on-year but rose in all other areas: 4% in North America and 2% in both Europe and Latin America.

Factors such as currency strength and the supply of rooms also impacted average room prices across the world, although the report shows that overall they were just 6% higher than when the HPI was launched in 2004.

Countries across Asia became a lot cheaper as the Australian dollar?s surged in the first half of 2011. Japanese cities featured prominently in the table of biggest fallers with Hiroshima, Kyoto, Osaka and Tokyo all posting double-digit price falls following the earthquake, tsunami and nuclear crisis in March. Singapore hotel prices, however, rose due to the strong occupancy levels driven by increasing number of both tourist and corporate travellers.

Conversely, the impact of the Christchurch earthquake had the opposite effect on prices than that of the natural disaster in Japan, with average rates in Auckland and Wellington rising by 3% ($111 AUD) and 15% ($119) as travellers switched their travel plans.

David Roche, President of, comments: ?This year, for the first time, dramatic political and natural world events, such as the Japanese earthquake and Arab Spring, have caused the most pronounced level of hotel price volatility.

?However, despite some exceptional price movements, it is important to highlight that, overall, the picture has been one of gradual recovery with many room rates still on a par with what they were seven years ago, representing great value for the traveller.

In the US, hotels became a lot cheaper in a number of popular cities, despite the average room rates showing a modest 2% increase. The average room rate fell by 19% to $128 in San Diego and by 5% in Las Vegas. There were some exceptions with San Francisco up 8% to $179, as the city remained popular with both business and leisure travellers. Honolulu also posted a rise, up 13% to $205.

Top 10 biggest price falls

(% price falls by city in H1 2011 compared with H1 2010)

Destination Average price per room per night H1 2011 % Change year on year
New Delhi 100 -38%
Hiroshima 91 -38%
Kyoto 118 -33%
Cape Town 146 -24%
Shanghai 114 -23%
Manila 126 -20%
San Diego 128 -19%
Abu Dhabi 144 -16%
Dubai 170 -15%
Taipei 113 -14%

Top 10 biggest price rises

(% price rise by city in H1 2011 compared with H1 2010)

Destination Average price per room per night H1 2011 % Change year on year
Stockholm 210 17%
Wellington 119 15%
Honolulu 205 13%
Buenos Aires 158 11%
SYDNEY 172 10%
Florence 189 10%
Singapore 213 9%
Bali 133 9%
San Francisco 179 8%


Notes to editors

About the Hotel Price Index

The Hotel Price Index (HPI?) is a regular survey of hotel prices in major destinations across the world. The HPI is based on bookings made on and prices shown are those actually paid by customers (rather than advertised rates) in the first half of 2011.

The HPI Australia version shows hotel prices across the world per room per night as paid by Australian travellers in Australian Dollars, comparing prices paid in the January-June period of 2011 with the same period in 2010.

View full report here.


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