The Most Expensive Cities 2003

According to a recent BTI UK survey, hotels in Milan are more expensive than in any other city worldwide with Paris only marginally cheaper. Rome which ranked as the most expensive city in 2002 has descended to 4th place, whilst London which was ranked 6th last year, has dropped out of the Top 10 altogether.

Based on a combination of industry figures, actual room nights booked and rates paid by BTI’s clients during 2003 – the results of the survey show that worldwide rates have declined by 4%, giving an average worldwide rate of £106.64. In addition, average corporate levels of demand have declined by nearly 10%, and over two-thirds of the destinations covered in the survey have seen room rates decrease.

Margaret Bowler, BTI’s General Manager of Hotel Relations endorsed the fact that the global economic slowdown, the impact of war, international health scares and the global economy have all contributed to fewer business travellers. The other European cities, which have made the Top 10 were more frequently chosen following the terror threats to our capital in 2003/2004.

The slow down of corporate travel in Europe originating from the US may also be due to a fear of anticipated terrorist activity in mid and long haul destinations. Bowler comments, “Long-haul destinations were hard hit as travel managers continued to mandate travel policies”. She explained that closer to home, with such a high supply of hotel rooms, rates in London continued to plunge – taking it out of the Top 10 most expensive destinations. However, due to the artificially low prices at the moment, London room rates are projected to increase by 7% to 12%.

A restriction on external meetings and overnight stays has resulted in sharp drops in volume and rates in the key UK cities too as many travel managers have discouraged unnecessary meetings, or curbed overnight stays in order to maximise budgets. Business travellers have chosen short-haul destinations instead and therefore European cities have reaped the benefits.

The most expensive cities worldwide 2003 compared with 2002

2003	City	Av Room Rate	2002	+/-
1	Milan	£148.09	3	+6%
2	Paris	£147.62	4	+9%
3	New York	£144.22	2	-11%
4	Rome	£138.87	1	-22%
5	Copenhagen	£138.57	10	+14%
6	Stockholm	£138.07	5	+2%
7	Geneva	£133.48	8	+8%
8	Frankfurt	£130.99	-	+15%
9	Amsterdam	£128.41	7	+1%
10	Zurich	£127.37	9	+3%
11	London	£122.55	6	-5%
Source BTI (UK)

BTI has noticed a decline in airport hotel usage too. Airport hotels have seen a drop between 1% at Gatwick Airport to Edinburgh at 21% however it’s more positive news for airports such as Glasgow and Newcastle which have seen increases following the origination of low cost flights.

If you are booking budget properties, you’re not alone, with hotels such as Travelodge gaining a larger share of this market. Indeed, many travel policies are now mandated to reduce the usage of more expensive properties.

If you’re booking hotels in the States, rates have become extremely competitive due to the best £/$ rate in years and the decrease in both volume and average room rates. The New York hotels have become very competitive and are offering excellent tactical rates to encourage business – as a result average NY room rates are down over 10% from £162.41 to £144.22.

Making further Travel Savings

In a recent DeskDemon poll you told us that reducing travel costs is a high priority to save the company money. As you continue to strive to save travel costs for your company, lead in times can bring extra savings - business travellers now allow just over 2 days before their departure to book accommodation – highlighting that many traveller arrangers are taking advantage of the lower tactical rates being offered by hotels. Further savings are also being made with business travellers cutting the length of stay, condensing their business trips or making more day trips.