Hotels Cut Prices Around the World

by Alfie FEATHERSTONE on September 16, 2009

The travel and tourism industry has been hit hard by the combination of a global recession and worry over the outbreak of the H1N1 virus.  Hotels have been especially hard hit, as fewer travelers means lower occupancy rates, which means lower revenue for hotels.  Especially hard hit have been those in the luxury hotel world, who have seen profits plummet to the point that some have dropped star ratings just to cut costs.

This is one explanation for the global slash in hotel prices, which on average went down over fifteen percent in 2009.  According to the latest Hotel Price Index the average rate of a hotel room dropped seventeen percent in the first half of 2009.  The study also showed that prices were more than one sixth lower than 2008, and that current room rates are a mere one percent higher than they were in 2004, which is far lower than the inflation rate during that period.

North and South America both led the way in the drop, with hotels in South America going down eighteen percent on average and prices in North America nearly the same at seventeen percent.  Hotels in Europe and Asia also saw similar cuts in room rates with only the Caribbean holding on in the single digits.

This has caused many desperate moves in the hotel industry, as hoteliers are looking for any possible way to cut costs.  This includes shutting down some floors in a hotel, and cutting back some of the free offerings like newspapers and flowers.

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