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Hotel prices in Stockholm go down by 7.1 %

According to Hogg Robinson Group’s interim hotel survey which was published on Monday the average rates decrease for Hotels prices in Stockholm were down by 7.1%. In comparison, Munich saw an increase in rates by 34.6% which is a huge difference but Stockholm were not the only city to see a decrease in hotel prices. Düsseldorf was down by 11.5% and according to HRG this is because both Düsseldorf and Stockholm were affected by oversupply and/or unfavorable exchange rates. It appears that 4-star hotels in Stockholm have gone down the most in the Swedish capital, followed by 2-star hotels.

Possible reasons for decrease in rates

In some cities there is so much competition for hotels especially with many people willing to stay at the hotel that offers them the best service. But since there are so many hotels one or two hotels will suffer business so in an attempt to bring in more customers Hotels will try to offer the best prices until someone decides they will not go lower thus decreasing the rates. Another reason that can see rates decrease is having an oversupply of things that are offered to customers so in an attempt to move them quickly hotels will put down the rates to bring more people in so they can get rid of the supplies before it is of no use.

Cities with largest increase in hotel rates

Munich (34.6%) and Barcelona (19.1%) saw the biggest increase in rates in terms of local currency. Some of the reasons for an increase in rates are as follows. Some hotels may have a shortage in supplies so in order to raise money for the supplies you increase the rates whilst keeping the number of your customers low so that you can manage with the supplies you have. Another reason is that some hotels can have a very good first half of the year which enables them to increase the rates because they build a good enough reputation to put the prices up without much risk because they done well enough in the first half of the year. HRG director of global hotel relations Margaret Bowler said: ?On the whole, occupancy is increasing faster which, coupled with continued high demand, means we will be likely to see rates climbing in certain markets in the second half of the year and beyond”.