A recent survey conducted by a global corporate service group, the Hogg Robinson Group plc (HRG), has surprisingly named Lagos, Nigeria’s commercial capital city as having hotels with the second highest room rates, just as Russia came tops in the poll conducted among leading business destinations of the world.
The survey however noted that average hotel room rates in Lagos have decreased by 6 per cent in British pounds and 5 per cent in local currency following an appreciable number of new hotel openings which have gone some way to ease pressure on capacity.
With a seeming influx of international brands into the city, like the Best Western, Intercontinental, Golden Tulip, Radisson Blu Anchorage, Southern Sun, Whitbread, Starwood’s Four Points by Sheraton, and with the expansion of existing brands like Protea, Rezidor, rooms rates have however, hovered between N60, 000 and N80, 000 per night for single or classic rooms, which the survey observed still remain some of the highest in the world, representing over $US500.
These top cities are also business hotspots catering to corporate travel. The survey is indicative of where companies are channelling their travel budgets.
Lagos, by implication also topped the room rates figures for hotels in Africa ahead of top tourists’ destinations like South Africa’s Cape Town and Johannesburg and Kenya’s Nairobi.
Out of 50 major travel destinations surveyed, the Russian capital has had the highest average room rate for eight years straight. HRG trends revealed Moscow as the priciest city for hotel stays, with rates climbing to 3 per cent in local currency since 2011.
In the case of Lagos, the survey noted that the high volume of inbound business travel was connected with the oil industry, considering that Lagos still remained the major entry point for most international airlines servicing the route, in the same way as the issue of security also played a major role in the soaring price of hotel rooms.
“Travellers to Lagos are also conscious of the city’s well-documented security issues and are more inclined to stay in five-star accommodation,” the survey stated.
The survey showed a year on year increase in 2012, compared with 33 cities in 2011. All results are based on a combination of industry intelligence, actual room nights booked and rates paid during January to June 2012 compared to the same period in 2011.
“Average hotel room rates in Lagos have decreased by 6 per cent in GBP and 5 per cent in local currency. New hotel openings have gone some way to ease pressure on capacity, but average rates remain some of the highest in the world. Security is a significant concern in Lagos, so business travellers are advised only to stay in one of the few, high-end hotels in the oil-rich city.
“The South African economy may be growing, but Johannesburg is still feeling the effects of an oversupply of hotels following the 2010 World Cup, resulting in a rate decrease of 11 per cent GBP and flat rates in local currency. Cape Town benefitted from a strong convention season, which saw room rates shoot up 5 per cent in local currency. It is worth noting however that these rises were largely cancelled out by currency fluctuations, which meant rates actually decreased by 7 per cent in GBP.
“Nairobi showed a rate increase of 5 per cent in GBP and 1 per cent in local currency. The city is experiencing increased demand as its markets recover from a dip in growth, but hotel rate increases have been arrested by investment in new hotels. More than 1,100 rooms are due to enter the Nairobi market before 2014, but steady rate increases are expected to continue.
In the overall, trends noted by the HRG survey include: For the 8th year in a row, room rates in Moscow are far and away the highest of any destination monitored by HRG. Hotel prices in the Russian capital have risen 3 per cent in local currency over the past year.
“Lagos emerged as the second most expensive destination due to the high volume of inbound business travel connected with the oil industry. Travellers to Lagos are also conscious of the city’s well-documented security issues and are more inclined to stay in five-star accommodation.
“Mexico City reported the highest increase in room rates at 30 per cent in local currency, as growth in demand, coupled with a lack of new openings, drove an aggressive increase in average achieved rates. Across the wider Latin American region, Rio de Janeiro and Sao Paulo reported rate increases of 15 per cent and 23 per cent respectively.
“Room rates in Tokyo recovered by 4 per cent as the region increased following the earthquake and tsunami in 2011. Dubai also saw room rates rise as business travellers returned to the region following the upheaval of the Arab Spring.
“Hotel rates in India were driven down by the country’s economic slowdown and lack of capital for new investments. Mumbai showed an average room rate decrease of 7 per cent and Bangalore 21 per cent in local currency.
“The financial crisis affected average room rates across the Eurozone leading to rate decreases in key European cities, notably Barcelona which saw rates fall by 22 per cent in local currency. Madrid and Dublin also reported 2 per cent and 6 per cent rate decrease respectively.
The UK saw a 2 per cent room rate increase, primarily driven by high rates in London and a select number of regional cities, including Liverpool which saw room rates jump by 8 per cent following increased economic activity in the region, while key destinations in the USA, including New York, San Francisco all saw average hotel room rates rise in the first half of 2012, as business activity increased in line with economic performance,” ” said Stewart Harvey, Group Commercial Director at HRG.
Now in its 20th year, HRG’s biannual hotel survey looks at hotel room rates for key business destinations across the world to provide a dynamic insight into global business travel behaviours. Data presented in the 2012 half-year survey is based on a combination of industry intelligence, actual room nights booked and rates paid during January to June 2012 compared to the same period in 2011.
HRG is the award-winning international corporate services company. Established in 1845 and headquartered in Basingstoke, Hampshire, UK, HRG specialises in travel, expense and data management underpinned by proprietary technology. With a worldwide network that comprises over 120 countries, HRG provides unparalleled global expertise and local knowledge in North America, Europe, Asia Pacific, Africa, Latin America and MEWA.
The list of 10 most expensive cities to stay in and their average hotel room rate include:1. Moscow, Russia: US$407; 2. Lagos, Nigeria: US$34; 3. Geneva, Switzerland: US$340; 4. Zurich, Switzerland: US$332; 5. Rio de Janeiro, Brazil: US$323; 6. New York City, New York: US$320; 7. Sydney, Australia: US$312; 8. Hong Kong, China: US$306; 9. Paris, France: US$304; and 10. Washington, D.C, United States: US$302.