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UK Hotel prices fall (and Take That boost the hotel business!)

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london-imagesAVERAGE prices for hotel rooms in the UK fell year-on-year in the first half of 2011 to £82 a night, according to the latestHotels.com Hotel Price Index™.

 

However, the overall drop of 1% masks other dramatic price movements across the country, with several towns and cities near London and popular tourist destinations seeing an above average percentage rise.

Bizarrely room rates in Watford soared 27%.

The country’s faltering economy, the relative weakness of the Pound, one-off events, such as the Royal Wedding, and popular culture, including TV programmes and pop concerts, were among the factors influencing the cost of a room for UK travellers in the first six months of 2011.

The average cost of a room in London rose 3% to£113 with the city at full capacity for events such as the Chelsea Flower Show and the Wimbledon tennis tournament.

More than 50% of all visits to the UK include a London component and the capital’s continuing popularity and higher prices in general forced visitors to look elsewhere for accommodation.

This trend led to some pronounced price rises in towns close to the city with room rates in Watford up 27%, the highest percentage increase in the UK report (to £70), High Wycombe up 16% (to £62) and Stevenage up 13% (to £53).

This effect was particularly evident during the Royal Wedding in April with both foreign and domestic sightseers seeking cheaper hotels outside London and then commuting in for the day to enjoy the celebrations.

Many of the country’s traditional tourist destinations saw price rises.

Cambridge was up 6% to £100 and York up 5% to £88, boosted by the staycation phenomenon and an influx of travellers from the Eurozone taking advantage of the Euro’s relative strength against the Pound.

The popularity of Oxford led to a 5% increase to £103 and an overspill effect as some visitors opted for nearby towns instead, such as Prime Minister David Cameron’s constituency Witney and Chipping Norton, both up 22%.

Hotels in some traditional seaside resorts also become more expensive

The buoyancy of the leisure hotel sector and traditional seaside resorts saw double-digit percentage price rises such as Scarborough up 18% to £60 and Southend-on-Sea up 12% to £85. The latter’s popularity was further enhanced by the ITV programme The Only Way Is Essex. The low value of the Pound and a squeeze on household budgets both acted to keep up domestic demand. There were also rises in Channel Island destinations with St.Peter Port in Guernsey up 4% to £115 and St. Helier on Jersey up 6% to £110.

Away from the coast, the Lake District remained popular with Bowness-on-Windermere at £134 a nighthaving the highest average hotel price in Britain for UK travellers amongst the destinations included in the report.

Hotel prices in many of the country’s largest cities stayed relatively flat in the first six months of the year. The average room rate in Newcastle-upon-Tyne was the same as in the same period last year at £81, there was a 1% fall in Liverpool to £77 and a 1% rise in Leeds to £67.

The Take That tour boosted occupancy rates in June which contributed to a 1% rise in venue cities such as Manchester, Cardiff and Glasgow.

However, there were some bigger price swings with Nottingham up 14% to £62 with the appeal of the city increased by one-off events such as the British Art Show in January and Nottingham European Arts and Theatre Festival in May-June. In contrast, the south coast cities of Southampton and Portsmouth registered 10% and 9% falls to £60 and £71respectively.

Oil business sees Aberdeen post the highest price increase in Scotland

The average room rate in Aberdeen was up 9% to £82 with prices buoyed by budget airline flights and the North Sea oil industry. The rising price of oil encouraged onshore training in the city, boosting occupancy rates. Prices in the capital of Edinburgh fell by 2% but it was the most expensive destination in Scotland with the average room rate at £97.

Matt Walls, Vice President of Marketing at Hotels.com, commented:“The overall 1% fall in UK hotel prices made domestic hotels attractive to British consumers struggling with rising inflation and shrinking household income.

“The sector was also boosted by the relative weakness of the Pound which led to an influx of foreign visitors and many popular tourist destinations actually saw some significant price increases as demand increased.

“A mixture of factors influenced UK prices in the first half of the year from the economy through to one-off events and popular culture but the average room rate of £82 still represented great value for consumers.”

Looking forward to the likely impact of events next year, Walls added: “The Royal Wedding was good news for the national hotel market although many of the places which benefited were around London as visitors sought value outside the capital. This could be a factor next year during the Diamond Jubilee celebrations and Olympics.”

London was the most popular destination for overseas travellers followed by Edinburgh and Manchester. The capital was also the most popular destination for domestic visitors ahead of Manchester,Edinburgh, Birmingham and Glasgow.

Average room prices and changes in the first half of 2011 across the UK


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