Hotel rates rose by just 0.8% year-on-year on a global level in the second quarter of 2007, according to the Hotel Price Index, but in Europe year-on-year prices rose 5.2%. In contrast, there was a small rise of 0.6% in Asia, whilst prices in the US and the Rest of the World fell.

The HPI is the most comprehensive and accurate source of global hotel pricing information. It is based on prices for 30,000 hotels across 1,500 locations around the world and on the actual prices paid by customers, rather than simply advertised rates.

Patrik Oqvist, marketing director of, comments: "While prices across Europe are up, many major global cities have actually experienced a price drop since last year, making some destinations great value for travellers."

The Hotel Price Index also shows that, outside of New York, many of the major US cities have real bargains on offer. Prices across the country fell to an average GBP71 per night in Q2 2007, down 0.5% on the same period 12 months before. This made the US more than 20% cheaper on average than Europe during the period.

Asian hotel prices rose slightly in 2007, up 0.6% to an average of GBP79.

The price of a room for the night in major European countries

Prices in Europe rose by 5.2% year-on-year in Q2 2007 to an all-time high, with prices up in most of the major city destinations. In some cases, price rises were driven upwards by a lack of supply in specific cities, such as London and Barcelona.

The average price paid for a room in 2007 in Europe was GBP89, which makes prices in Europe far higher than those anywhere else in the world.

The UK posted a rise of 17% year-on-year, making it the most expensive country destination across Europe. A hotel in the UK now sets the average traveller back GBP110 per night, 8 per cent more than Switzerland, the next most expensive nation at GBP102.

As well as the UK, the major Scandinavian countries of Norway and Sweden were amongst those where prices rose most strongly, up 16 per cent and 10 per cent respectively year on year.

At the other end of the scale, Poland and Hungary were Europe's cheapest nations overall.

Overall cheapest destinations

With prices averaging GBP55 across all star ratings, Cape Town was the cheapest of the world's major cities. With over capacity in the market driving down prices, hotels are introducing special offers in the face of growing competition. Longhaul destinations now represent some of the best-value city breaks around the world for those willing to travel further afield:

- In the Far East, cities including Guangzhou, China (GBP58) and Jakarta, Indonesia (GBP58), offer some of the cheapest rooms of those in the HPI global basket

- In South America, Mexico City (GBP58), Sao Paulo (GBP60) and Buenos Aires (GBP64) all offer some of the most reasonable average prices for travellers globally.

- Several top US destinations were amongst the cheapest cities. Orlando (GBP58) and Las Vegas (GBP60) both offer rooms at less on average per night than the cheapest European destination (Berlin at GBP67 per night).

- Berlin, Warsaw and Pisa were the cheapest major cities in Europe.

Most expensive destinations

- At the other end of the scale, Moscow (GBP192) had the highest average price for a room for the night, than any other major city worldwide. New York remains the world's second most expensive major city (GBP142), a rise of 7% on the same period in 2006. London was the fourth most expensive of the world's major destinations - posting a 19% rise in prices year-on-year to GBP119 per night on average.

The biggest risers

Jerusalem, Cairo and Bangkok all saw big price rises between 2006 and 2007. In Jerusalem, prices rise by one third (31%) in this period as the city has been enjoying an impressive demand increase which has driven prices higher.

London saw one of the highest price rises for the major European capitals - a 19% year-on- year rise. This increase reflects a lack of cheaper hotel rooms in the city, which is becoming more expensive overall as travellers are forced to book higher rated (and therefore more expensive) hotels.

The biggest fallers

Cape Town posted the biggest price fall over the past year, when compared to the same time one year ago as prices fell 31%. Other big year-on-year falls were posted by longhaul cities, including Mexico City, Cancun, Bali, Tokyo, Seoul and Shanghai. Frankfurt, Amsterdam and Pisa were the only European cities to experience a fall in prices year-on-year.

Patrik Oqvist concludes: "With the enormous range of bargain hotel rooms in the rising destinations, travelers can explore the world on a very reasonable budget. Greater savings can be made by using our site,, where we regularly have savings of up to 25% on offer."

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