North American hotel prices increase by five per cent

The Hotel Price Index shows Canada and U.S. ahead of the three per cent global increase which was curbed by slump in European prices

The average price of a hotel room around the world rose by three per cent during 2012, compared with the previous year, according to the latest® Hotel Price Index™ (HPI™). The rate of increase has moderated when judged against the four per cent rise in 2011 as the Eurozone’s problems pulled down the global average and slowed growth in the second half of the year.

Three regions drew away from the rest. The Caribbean saw a six per cent rise, North America had one of its best results in recent years growing at five per cent and the Pacific gained four per cent, all outpacing the global figure. Asia added two per cent and Latin America one per cent while the Europe and Middle East region registered a slight fall.

A look at Canada shows that travel was on the agenda in 2012, as Canadian travellers increased their spend on hotel accommodation and paid an average of $144 per night for domestic hotel stays and $150 per night internationally. Popular Canadian cities remained relatively consistent with Toronto, Montreal and Vancouver continuing to dominate the top three for both domestic and international travellers. Toronto and Montreal also both reported price increases of two and three per cent, respectively. Quebec City was one Canadian destination that saw a change in popularity, bumping out Victoria to enter the top five for international travellers. On the West Coast, provinces Alberta, Saskatchewan and Manitoba saw prices rise with the former also being home to some of the most expensive Canadian destinations, Kananaskis ($259) and Lake Louise ($246). Speaking of higher prices, international travellers who paid the most for Canadian accommodation in 2012 were from Chile, Colombia, Australia and Japan.

Launched in 2004, the HPI looks at prices that people actually paid for their hotel rooms around the world. The 2012 Index stands at 107, ten points behind its 2007 peak of 117 and only just ahead of its 2005 level of 106.

David Roche, President Global Lodging Group for Expedia, Inc., said: “Europe’s hoteliers aren’t immune from the region’s economic problems, and they weren’t able to keep pace with a recovering global market in 2012. Although prices have risen globally, a hotel stay still offers consumers great value, with rates consistently below their peak levels of five years ago.”

The Eurozone crisis not only impacted prices in its own territory but had a knock-on effect across the region as financial insecurity dampened travel plans.

While in Canada, the strength of the Canadian dollar and stable economy in 2012 meant travel, particularly to U.S. destinations, was thriving. Cross-border visits which allowed Canadians to take advantage of U.S. deals remained popular, with New York taking the top spot and Seattle moving up one position to third.

In the Caribbean, the trend towards more all-inclusive holidays has pushed up the average price paid. The U.S. saw an influx of international visitors in 2012 which meant hotels had less need for discounting. In the Pacific, the mining boom in Australia and strength of the Australian dollar continued to drive strong city hotel rates but made it difficult for some leisure destinations dependent on inbound demand. Latin America has witnessed a sustained period of growth in prices paid by customers over the past few years, driven primarily by the booming economies in the two key markets of Brazil and Mexico.

In Asia, a roster of events moved prices up and down across the region, including downward pressure on rates in India, due to a precipitous fall of the Rupee, travel demand shifts due to the politically sensitive situation around the islands in the East China Sea, and price bounce-backs from the 2011 earthquake, tsunami and nuclear disaster in Japan and flooding in Thailand. The continued increase in the number of Chinese international travellers helped fill hotel rooms and the expansion of low cost carriers also boosted travel opportunities.

“International tourism is expected to climb again in 2013,” said David Roche. “Much of the focus of the hospitality industry is now moving east, where the rate of increase is the highest and new infrastructure is helping to drive travel patterns. The Asia/Pacific region added twice as many new hotel rooms as Europe in 2012 and will account for 40 per cent of the world’s new builds in 2013. Rates here are rising but the region still offers great value for travellers with some of the lowest prices in the world.”

For a full copy of the Canadian version of the HPI, visit

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