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Hotels, economically speaking, are of the elastic demand variety of intangible goods in that as income rises, more people tend to rent hotel rooms for vacations and business trips, and likewise as income drops, less people are able to afford to rent a hotel room.
What we are seeing here is the effects that the economic depression is having on main street North America. With people earning less income as previous years, they are simply not able to afford to rent a hotel room or the travelling costs associated with them. A study by STR provides an interesting graphic illustration of the relationship between price and hotel room rentals.
Graph by Managerial Econ
Hotel rates down steeply in US and Canada
After months of plummeting room-rates in London and elsewhere in the UK, recently revealed studies suggest that a similar cut is being experienced in the United States of America and neighbouring Canada.
According to data released by industry research company Smith Travel Research, average daily hotel rates are down nearly 10% in both the United States and Canada. The average daily rate in the US had plummeted to $100.30 during the week ending September 26. This figure is around 10.1% lower than average rates for the same period last year.
All major US markets recorded a decrease in average room-rates, with San Francisco and Houston recording the most dramatic decreases. These markets decreased by over 20%, with the average room rate in San Francisco dipping to $158.58, while Houston rates nosedived to $92.59.
Norfolk Virginia Beach recorded the smallest drop, down only 2.2% to a current average of $86.04. Nashville in Tennessee also showed a relatively small drop, with a 4.9% dip taking room-rates to $95.11. All other markets dipped by over 5%.
In Canada, a 6.9% drop was recorded nationwide. The average room rate for Canada is now at CA$129.69, according to the data released by Smith Travel Research on October 2.
Original full story available on ASAP UK
Findings confirmed from RelaxNews via Independent UK
Hotel rates down steeply in US and Canada
The average daily hotel rate is down nearly 10 percent across the US and Canada, according to data released October 2 by industry research firm Smith Travel Research (STR).
The week ending September 26 saw the average daily hotel rate in the US finish at $100.30, which is 10.1 percent less than at the same time last year.
All of the top 25 markets reported decreases, with Norfolk-Virginia Beach posting the smallest drop, down 2.2 percent to $86.04. Nashville, Tennessee, was the only other region that fell less than 5 percent, with a 4.9 percent fall to $95.11.
Two markets, San Francisco and Houston, Texas, reported decreases in excess of 20 percent, to $158.58 and $92.59 respectively.
Original story available on Independent UK
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