Business Travel News - March 29, 2010 - (Page 22)

Int’l Per Diems Show Oil Cities’ Ascendance BY AMON COHEN T his year's Corporate Travel Index shows a major geographical shift in gravity of the list's most expensive cities. Last year, seven of the top 10 destinations for hotel rates were in Western Europe, but this year, there are only two: Geneva in sixth, and Paris in 10th. Instead, the new global accommodation pain point is the Gulf. It has no fewer than four of the top 10 cities: Abu Dhabi at the top with $322, Muscat in second at $316, and Doha and Kuwait tied for seventh at $267. However, it would be even more accurate to say the top 10 no longer is defined by ge- acceptable standard for business travelers in recent years, which has helped contain average room rates. This year’s Corporate Travel Index for the first time bases its hotel figures on actual rates paid rather than those booked or negotiated by corporate clients. This advancement in data quality was provided by Advito, the consulting wing of global travel management company BCD Travel, the longtime provider of hotel data for this index. Advito also has provided comparative figures for the previous year that show just how dramatically accommodation costs have fallen in 12 months. Last year, BCD Travel clients paid an average $224 per night in the top 100 cities. This year, it is $190. At $526 (or E367) per day, Paris tops the list of daily business travel costs out of 100 cities outside of the United States. ography but by sector. Along with the four Gulf locales, three more cities in the top 10 have strong ties to the oil and gas industry: Moscow, Kiev and Caracas. Not only is demand high in all the oil and gas cities, but supply remains a problem. They are well-represented in the five-star property bracket, but tend to have far less room stock below that tier that would be acceptable to a business traveler. In Western European countries, by contrast, there has been significant expansion in budget accommodation of an Looked at another way, a night’s hotel accommodation cost north of $300 in 13 cities last year. This time, it only costs that much in three cities. Although oil and gas cities dominate the top 10, they have experienced mixed fortunes over the past year. Caracas, with the list’s sharpest increase at 14 percent, Abu Dhabi, up 7 percent, and Doha, up 4 percent, belong to a select list of only six cities in the top 100 that have experienced rate rises. The other three were Nairobi, up 9 per- cent—finally recovering after civil unrest caused a disastrous visitor slump in 2008— Mexico City, up 5 percent, and Sao Paulo, up 2 percent. On the other hand, Moscow saw its hotel rate slump 39 percent from $505 to $309. This was the biggest percentage fall in the Index, but the Russian capital slipped only as far down as third in the table from its top position last year. Similarly, Kiev is 25 percent cheaper this year at $288, but has only slipped from second to fourth. Three other cities experienced rate tumbles in excess of 30 percent, and all three are Indian: Delhi, down 32 percent, Mumbai, down 36 percent, and Bangalore, down 35 percent. In addition to general rate deflation, these cities have gone some way during the past 18 months to redressing critical supply shortages, and the Mumbai massacres of November 2008 may well also have been a factor. The Gulf region’s rates have been least affected by the downturn. Not only are Abu Dhabi and Doha up, but almost all other cities are down only by single-digit percentages, which can be considered an achievement in the current climate. The principal exception to this is Dubai. The spectacular and well-documented halt to its overheated growth, which had included a frenetic outburst of luxury hotel construction, led to rates plunging 26 percent to $238. Western Europe has had its share of rate decline too. Its international gateway cities are clustered between the 10th and 30th position on the list of hotel rates, with prices down by double-digit percentages, including London, down 24 percent, Paris, down 10 percent, Frankfurt, down 14 percent, and Amsterdam, down 20 percent. When food and miscellaneous costs, such as taxi rides and a newspaper, are added to hotel rates to provide a per diem total, the big Western European cities move up the top 100 significantly. While the Advito hotel rates are based on actual rates paid, the food figures, which are provided by the consulting firm Organization Resources Counselors, are more representative of the prices that would be paid to eat three full meals at some of the best dining establishments in the city. To take the most expensive example, daily 22 CORPORATE TRAVEL INDEX 2010 www.BTNonline.com March 29, 2010 SHUTTERSTOCK http://www.BTNonline.com

Table of Contents for the Digital Edition of Business Travel News - March 29, 2010

Business Travel News - March 29, 2010
Table of Contents
Domestic Corporate Travel Index
Per Diems In 100 U.S. Cities
Alphabetical List Of U.S. Cities
Hotel Costs In 100 U.S. Cities
Food Costs In 100 U.S. Cities
Car Rental Costs In 100 U.S. Cities
City Profiles - Beijing
City Profiles - Hong Kong
International Corporate Travel Index
International Methodology
Per Diems In 100 International Cities
Alphabetical List Of International Cities
Hotel Costs In 100 International Cities
Food Costs In 100 International Cities

Business Travel News - March 29, 2010