Friday, March 5, 2010

Hotel Wakeup

We have been following the media reports about the 2009 average room rate survey recently released by

OTA's have a wealth of data that can be padded into interesting press releases that most journalists can easily cut and paste into newsworthy items after adding some localised observations and comments. This is a great publicity branding exercise by that were able to freely place their website address across worldwide MSM, websites and blogs (including this one!).

Overall, The survey recorded hotel rates around the world plunging by 14 per cent in the 2009 year.

Interestingly, Auckland was the only New Zealand city of the 77 destinations surveyed by In the race for the world's cheapest hotel location, Auckland sadly took 75th place with only Manila and Warsaw achieving lower average tariff.

Embarrassingly, the average room rate in Auckland in 2009 was $130, down from $172 in 2008, a 24 per cent decrease.

Jennie Langley, chair of the New Zealand Hotel Council disputed the results and suggested that the survey did not take into account daily changing hotel sell rates and seasonality.

As a point of comparison, Ms Langley was reported in saying that hotels across New Zealand had experienced a 3 per cent fall in room rates. 

So how credible are the results from for Auckland?

From our casual observations, we have to give the survey some credence. The price index is not a one-off spot survey of hotel prices. In fact it is based on actual bookings made on using tariff paid by guests over the 2009 year. No survey is perfect, however there appears to us to be a reasonable sample of hotel properties using in Auckland to give a good indication of tariff comparison with other markets.

Instead of shooting the messenger, the accommodation industry has to acknowledge that accommodation tariff in New Zealand is artificially low compared to other world markets and  needs to investigate how this can be lifted.

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