Insight

Bangalore Hotels Third Costliest In The World - BTI UK Survey

Globally, hotels are witnessing the best of times and India features prominently at the top. Riding on its high ARRs, Bangalore figures as the third costliest according to a BTI UK survey. Express Hospitality takes an indepth look

The global hotel industry is enjoying a growth phase and showing signs of a strong performance recovery - according to a new survey by UK's leading corporate travel management company, BTI UK.

The survey revealed exceptional hotel room rate increases in Moscow and Bangalore (29 per cent and 42 per cent respectively), reflective of Russia and India's increasing business development prospects and growing importance to business travellers. This ongoing economic activity ensured their entry into the global top three most expensive cities, with Moscow topping the poll with the highest hotel room rates worldwide.

In the first six months of 2005, Moscow replaced Milan as the city with the highest average room rate (BTI UK Hotel Survey, 2004). Rome is now the most expensive Italian city for business travellers and its current popularity as a conference and meeting destination positioned it as the second most expensive city worldwide for business travellers. The appearance of Moscow, Rome and Bangalore, along with new-entrant Athens, push Zurich, Copenhagen, Frankfurt and Amsterdam out of the Top 10 most expensive list. Bangalore's number three position is reflective of its overall economic growth with BTI UK noting particular activity in the banking, finance and IT sectors. London remains static in 7th position, despite a 6 per cent increase in average rates.

BTI UK's survey is based on a combination of industry figures, actual room nights booked and rates paid by its clients during January - June (inclusive) 2005.

Average rate increases across all regions are a key indicator of the global recovery in the hotel market. The average hotel room rate worldwide now stands at £107.74, up 6 per cent from last year (based on BTI UK figures). Eastern Europe has recorded the highest regional hotel rates, up by 27 per cent, in part as a result of rate movements in Moscow. Substantial increases have also been recorded in the Middle East & West Asia (MEWA) and Africa regions. Comparatively, last year only the UK, Europe and Africa showed any growth.

India is currently seen as a huge growth market, with demand for hotel rooms far outstripping supply. Key cities, such as Bangalore, have seen major investment from the UK with many companies introducing or re-locating their operational offices into the country. Volumes in India have increased in tandem with new airline routes and activity and in response many major hotel chains have announced large expansion plans covering all property levels and star ratings. However, outside the key commercial cities, the hotel industry in India is still highly seasonal.

India
City	Average Rate 2005 Jan-Jun	Average Rate 2004 Jan-Jun	% Var on ARR
	Total	Total
Mumbai	77.48	76.3	2%
Bangalore	147.83	103.93	30%
Hyderabad	89.15	56.19	37%
New Delhi	90.09	76.9	15%
Pune	57.05	45.77	20%
Chennai	69.41	61.42	12%
Surat	46.15	31.6	32%
Goa	81.16	91.8	-13%
Visakhapatham	23.71	25	-5%
India Country Total	58.78	45.19	23%
Table shows average room rate by city

Top 10 Global Average Rates:
City	Jan-Jun 05 ARR	Jan-Jun 04 ARR	% +/-
Moscow	165.21	128.26	29%
Rome	157.65	139.3	13%
Bangalore	147.83	103.93	42%
Paris	146.1	138.17	6%
New York City	145.83	136.44	7%
Milan	141.69	144.28	-2%
London	136.66	128.55	6%
Geneva	135.97	123.95	10%
Athens	134.23	132.2	2%
Stockholm	133.67	129.6	3%
Table shows top 10 highest average room rates (£) by city

Average room rates by region: