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

The survey revealed exceptional hotel room rate increases in Moscow and Bangalore (29% and 42% 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.

Other key survey findings include:

• Paris slips down the ‘most expensive' table to fourth place
• Budget hotels continue to outperform four and five star properties
• India is highlighted as a growth market with demand far outstripping current availability
• Most Chinese cities are experiencing double digit growth year on year
• USA rates remain static despite favourable exchange rate but further growth is expected
• Travellers are planning their itineraries further in advance, but cancelling hotel bookings nearer to the date of arrival

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.

Margaret Bowler, General Manager of Hotel Relations at BTI UK, comments: "Overall the global hotel industry continues to show clear signs of recovery. Eastern Europe and Asia Pacific have seen particularly strong growth which is indicative of increased business activity in these regions.

"Looking to the UK and following a positive start to 2005, there are early indications that the recent London bombings are likely to impact the country's key business destinations, with increases in hotel bookings in provincial towns and cities. The extent of the shift out of the capital will become apparent towards the end of the year.

"Exchange rates have been a major factor in declining average rates in the USA in recent years. However, as the US dollar strengthens key cities are starting to see growth in their average rates."

Part 2: In-Depth Analysis

Top 10 highest global average room rates:

Table shows top 10 highest average room rates (£) by city

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% increase in average rates.

Average room rates by region:

Graph shows average room rate by region

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% from last year (based on BTI UK figures). Eastern Europe has recorded the highest regional hotel rates, up by 27%, 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.

Key Country Focus : United Kingdom

Table shows average room rate by city (£)

Last year all key UK locations surveyed by BTI UK experienced rate increases and this positive trend looks set to continue. Leeds and Cardiff are the only two cities to have noticed a decrease in average costs, largely due to the fact that both cities have seen an increase in the number of rooms available due to the expansion of existing properties and new openings.

London, which is leading the recovery in the UK, experienced a 6% increase in average rate year on year. When compared to the same period in 2003, the figure rises to over 18%.

Key Country Focus : China

Table shows average room rate by city

Most Chinese cities have recorded double digit growth when compared to the same period in 2004. Volumes are expected to grow based on the growing number of business travellers visiting the country and rates in Beijing are particularly expected to see large increases as the city hosts the Olympics in 2008.

Brand recognition and loyalty, highlighted by experts as critical within the Chinese market, will continue to be key as major hotel chains announce aggressive expansion plans.

Key Country Focus : India

Table shows average room rate by city

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.

To Continue to Part 2, please click link below.