Hotel prices in Australia's major cities fell across the board between 2008 and 2009, with the exception of a modest increase in Perth, according to the latest global Hotel Price Index from Hotels.com.
The study, now in its seventeenth year, found that hotel prices globally fell by 14 per cent due to the global financial crisis.
Sydney and Melbourne, traditionally seen as tourist and business hubs, both saw the average price of a hotel room fall by 16 per cent, with averages of $145 and $148 respectively. Melbourne experienced the tenth biggest drop globally.
Johan Svanstrom, managing director, Asia Pacific, at Hotels.com, said "It simply comes down to supply exceeding demand. In 2009, demand for hotel accommodation plummeted, hit by a severe reduction in business travel and weaker consumer spending. On the plus side, for consumers, the gap in price between three, four and five star hotels narrowed in 2009".
Perth was the only Australian city to register an increase in hotel prices, which also earned it the title of Australia's most expensive city for hotel accommodation. The increase was modest however, at only one per cent, which brings the average rate per night to $154. This is a marked change from 2008 when Perth ranked as the second most affordable city in the country.
"Perth has not suffered as much as other domestic markets, reporting strong performances and average occupancy rates above 80 per cent, resulting primarily from the resource sector," Svanstrom said. "Perth comprises some of the most productive mining regions in the country and the result in demand from this sector has supported the accommodation markets."
At the other end of the scale, Cairns was named Australia's least expensive city for hotel accommodation, with travellers spending an average of $117 per night in 2009.
While prices appear to be stabilising, particularly in the US and Europe, hotels in Asia Pacific are still experiencing the effects of the economic downturn. Unlike other regions, the price falls experienced by hotels in Asia Pacific accelerated the the fourth quarter of 2009, down 19 per cent, whereas the rate of decline slowed in every other part of the world.
"2010 looks set to be the year when hotel prices stop falling. But, despite some early indications of recovery, particularly in occupancy, few hoteliers expect significant price increases," Svanstrom said. "The traveller is set fair then for another year of good value."
