London hotel prices drop, Edinburgh prices rise

By Luke Nicholls

- Last updated on GMT

Related tags: Olympic games, Summer olympic games

Hotel prices are set to drop by around 35 per cent in London, while average prices are up by 46 per cent in Edinburgh
Hotel prices are set to drop by around 35 per cent in London, while average prices are up by 46 per cent in Edinburgh
Any positive effects of the London 2012 Olympics on the hotels in London are likely to be offset with a drop in room prices by an average of 35 per cent across the capital.

According to the monthly Trivago Hotel Price Index by trivago.co.uk, prices will drop from £201 per night during the Olympic period (July 27th to August 12th) to an average of just £130 the following week - this is £20 cheaper than the same time last year.

Prices are also down 14 per cent compared to last month (from an average of £210 per night to an average of £181), suggesting that hotel inflation was worst in the weeks leading up to the Olympics.

And, while the Games saw a surge of visitors to the capital, hotel booking websites have actually reported a reduction in bookings during the 16-day period.

Figures from HouseTrip.com saw bookings decrease by 10 per cent from the same period last year, while bookings immediately before and after were up by 40 per cent.

“Those who took advantage of the price gouging of London hotels early by listing their properties and pricing them affordably reaped the biggest rewards,” said Arnaud Bertrand, HouseTrip’s chief executive.

“But the big opportunities haven’t ended with the Games. In fact, the Olympics have proven to be just the tip of the iceberg.

“With the higher profile of London, we anticipate that interest will continue to soar. While the games period has caused a loss from our larger domestic and French markets, the interest in London and strong London brand image created by the games has translated into booming numbers as the year continues

“We look at the Games as an investment into the future and have large-scale investment plans scheduled for the future to capitalise on this interest.”

Edinburgh Fringe Festival & Bed Tax

Meanwhile, outside of London, significant changes have been happening to the hotel sector in Edinburgh. Average prices in the Scottish capital are up 46 per cent compared with last month with the Edinburgh Fringe Festival running for nearly all of August.

The Edinburgh Fringe Festival began on 3rd August and runs until August 27th. The average price of one night in Edinburgh is £177, 46 per cent higher than July, when the average was £121.

The statistics follow Edinburgh Council’s recent pledge to revive plans to introduce a bed tax, plans which were quashed by the Scottish Government at the turn of the year but if put into action would see an additional charge placed on a customer’s bill of between £1 and £2 a night per hotel room.

Charging Edinburgh tourists more on their hotel bills could result in an extra £38 million being spent by visitors in the city every year, according to new research, but hoteliers are against the scheme.

Nicola Taylor, marketing director of hotel management contract service provider Chardon Management, said: “The proposals would have the effect of turning tourists away from Edinburgh at the very time when, as we enter into another recession, our ability to attract tourists is more important than ever, bearing in mind that our tourism sector is Scotland’s biggest employer by a considerable margin.

“In fact, rather than seeking to add on a further tax to hotel guests, Edinburgh City Council should instead be lobbying government to slash the VAT on visitor accommodation from the present uncompetitive 20% to 5% in a concerted drive to attract tourists and thereby give the local economy the boost it so desperately needs.”

Earlier in the year, Simon Kershaw, chairman of the northern region committee of the British Hospitality Association (BHA), joined hoteliers in York calling for planned similar ‘bed tax’ charges for tourists staying in the city to be dropped.

Related topics: Trends & Reports

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