UK hotel rates up 14% year over year in January

UNITED KINGDOM Hotel rates in the United Kingdom are on average 14% higher than in January 2010, and many cities have experienced even larger increases in accommodation costs.

The Europe rate average has fallen 2% to £88, and 29 of the 50 top Europe cities tracked by online travel agency Trivago are offering cheaper rates than in December.

Accommodation costs in London are 20% higher than last January’s average of £109, and the same is true in Sheffield (up 20%), Blackpool (up 21%), Liverpool (up 23%) and Newcastle (up 27%). Overnight costs in Edinburgh and Manchester are 9% higher than a year ago, while Glasgow is up 6%. The only major UK city to experience a decline in prices is Bristol, where average hotel prices are down 3% to £84.

Month-to-month metrics are less encouraging, however, as the majority of UK cities experienced a fall in hotel prices from December. London dropped 14% percent to £130 per night for a standard double room—its lowest point since August. Manchester also experienced a significant decline, falling 17% to £81. Other cities with reduced hotel rates this month include Edinburgh (£88, down 12%), Leeds (£67, down 11%), Glasgow (£71, down 8%) and Blackpool (£62, down 7%). The only cities with rising hotel prices were Cardiff (up 12% to £71), Birmingham (up 10% to £71) and Liverpool (up 8% to £86).

The introduction of the VAT surcharge on January 4, raising the UK’s national VAT from 17.5% to 20%, has resulted in a barely discernable upward momentum of online hotel prices. The impact on the consumer side is for the most part negligible, however, as the additional 2.5% charge has little effect on budget accommodation, and even in the case of luxury hotels amounts to only a few extra pounds per night.

Average prices in Ireland, Denmark and Austria have seen important price declines in comparison to last month (down 12%, 10%, and 9%, respectively), average accommodation costs in France (£116, up 31%), Switzerland (£165, up 17%) and Italy (£92, up 12%) have soared. In Paris, a night in a standard double room costs £125 (up 5%), while a similar room in Lyon costs £101 (up 10%) and in Cannes, £98 (up 20%). Prices in Geneva have risen to £178—a 13% increase that brings the city’s average to its second highest price point in over a year. More favorable destinations for January city breaks are Brussels, down 10% to £89 per night, and Barcelona, which has fallen 13% to £81 per night.