Do Deals Exist at High-End Hotels?
It surprised me, too. The most expensive city in which to rent a hotel room in 2007 was Moscow. According to Hotel.com's Hotel Price Index, it topped out at $380 a night, an increase of 17% over the previous year.
Now this might seem strange, or even fantastical, to anybody who experienced the grimy awfulness of Moscow's Intourist hotels of the 1980s. But today the Moscow hotel industry is locked in the grips of an ironic capitalist struggle between supply and demand, and at the moment demand is beating the socks off supply.
The consumers of Russia's vast natural resources are all there to curry favor with the string-pulling political bosses, while the West's luxury consumer companies—everybody from London's upscale gun-and-fashion retailers to Italy's Antinori Wine family—want to introduce Russians to the good life available to them by just depositing a few of those new rubles in their cash registers. Well, more than a few. The most expensive suite at the Ritz-Carlton in Moscow, operated by Marriott International (MAR), is $17,555 per night.
Climbing Hotel Rates in NYC
But the New York hotel scene is even more challenging. Following the closure of the iconic, if unloved, Plaza Hotel, New York's hotel situation has gone from bad to worse as its economy has boomed and the dollar sank. Businesspeople and tourists are flocking to Manhattan in record numbers, and there simply aren't enough rooms to accommodate them all. As a result, rates have soared like Weimar deutschemarks. How bad has it gotten? In November, the Hotel Le Bleu, a minimalist boutique hotel opened its doors at a whopping $259 per night for its cheapest room.
What's amazing is that this is not Manhattan's Fourth Avenue but the one in Brooklyn's Park Slope, a drag more known for its auto body shops, discount denim stores, and hair-braiding salons than Fifth Avenue chic. It might be O.K. for the visiting German hipster but not for the businessperson or family looking to be close to midtown.
Yes, Manhattan's hotel rates continue to climb (have they ever been cheap?). According to Hotel.com it's the second-most expensive city with rates averaging $280 per night in 2007, an increase of 7% over 2006. More telling for the business traveler, the average cost of a five-star room in New York in 2007 was $354.
Business Travel Remains Essential
Ten years ago, when the information superhighway was being built, there was a lot of futuristic nonsense about how it would reduce the need for business travel, as people would instead teleconference their way around the world. We've now seen just how inaccurate that prediction was. In fact, the reverse has happened: Information technology, combined with free trade, or freer trade, has made the world seem smaller so people no longer think it unusual to hop on a plane for Paris or Singapore to attend a meeting and return the next day.
The annual Barclaycard Business Travel Survey confirmed that a large majority of these business travelers, 79%, believe their business has benefited from travel. Notes Denise Leleux, commercial director of issuing at Barclaycard Business: "It is clear that despite modern communications people still believe that travel is an essential part of business."
And demand is unlikely to wane anytime soon. According to the global American Express Business Travel Forecast: "Business travel demand will outpace capacity in 2008 and drive rate increases across air, hotel, car rental, and meetings." They see upper-range hotel rates rising 5% to 8% in North America, 21% to 24% in Britain, and a whopping 27% to 29% in Singapore.
Buoyant Hotel Performance
Will fears of an economic downturn dampen demand for hotel rooms? Not according to Jan Freitag of Smith Travel Research in Hendersonville, Tenn. He believes that "despite fears of a global economic slowdown, business and leisure travel is expected to keep hotel performance statistics buoyant. In the U.S., hoteliers are expected to again sell over 1 billion room nights in 2008." He also forecasts that the emerging economies of China and India will continue to attract high-end travelers while the planned new rooms haven't yet come online.
So what's a budget-impaired business traveler to do? We have compiled a list of the cheapest rooms at the world's most expensive hotels, but be warned: "Cheap" is a relative term when it comes to luxury hotels, especially in Moscow or New York—not to mention Dubai—and by comparison Hong Kong and Shanghai will seem like bargains.
Click here to see the cheapest rooms in the most expensive hotels.
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