Potential rental boom for would be expats

by Ray Clancy on June 4, 2012

Many British holiday home owners look to relocate abroad

One in three British holiday home owners would relocate abroad mainly to escape the weather in the UK, according to results from a recent survey conducted by HomeAway.

The top reasons for wanting to relocate were better weather, better quality and more relaxing pace of life, as well as the desire to retire there one day. A lower cost of living and the possibility to enjoy a more active lifestyle were two other popular incentives.

But they also face being able to rent out their holiday homes more easily as cash strapped holidaymakers are facing rising hotel costs. The cost of a hotel room increased by 4% in 2011, according to research from Hotels.com.

Its latest Hotel Price Index (HPI), the most comprehensive survey of room rates in the world, reveals increases in 69 of the 88 city or resort locations analysed across the world.

However, there were some dramatic swings in the cost of accommodation caused by historic political events including the Arab Spring and natural disasters such as the Japanese earthquake.

According to David Roche, president of Hotels.com, price volatility in 2011 meant travellers found it more expensive to stay in the majority of their favourite destinations abroad.

Last year, prices fell 2% in Asia year on year but rose in all other areas. They were up 8% in the Pacific, 5% in North America, 4% in Latin America, 3% in the Caribbean and 2% in Europe and the Middle East.

There was less discounting amongst hoteliers in 2011 than in 2010 and business travellers drove up room demand and prices, with convention centres such as San Francisco and Las Vegas up 14% and 11% to £113 and £78 respectively. New York rose 4% to £173.

The average hotel price in Australia rose 13% to £108 reflecting the country’s strong currency and robust economy. Brisbane, which was hit by extensive flooding in January 2011 saw a 26% rise to £110 as business travel recovered quickly.

There was also a 12% rise in New Zealand to £73, fuelled by high demand around the Rugby World Cup in September and October. Earthquake hit Christchurch saw a 41% rise to £81, the highest increase in the survey.

The strength of the booming BRIC economies of Brazil, Russia, India and China was also largely reflected in hotel rates as corporate demand increased along with domestic custom.

Rio de Janeiro was up 13% to £156, Moscow rose 9% to £164, and Hong Kong climbed 18% to £119, boosted by strong business as well as consumer interest from the Chinese mainland.

Asia was the only region to experience a price fall in average rates, down 2%, partly due to devastating natural catastrophes. The Japanese earthquake in March 2011 saw price cuts in Hiroshima by 16% to £67 and in Kyoto by 11% to £91. Asian destinations offered the lowest rates, with Phnom Penh on just £40 a night.

The Arab Spring protests and war in Libya hit prices across the Middle East and North Africa with average rates falling in Egypt by 22%, in Tunisia by 9%, in Lebanon, which borders Syria, by 21% and in Qatar by 27%.

However, the Omani capital of Muscat was the most expensive city featured in the HPI at £219 with demand fuelled by luxury seeking travellers from Europe, especially Germany.

London prices rose marginally by 1% to £115. Amsterdam increased 9% to £116 and Venice and Barcelona were up 8% to £137 and £104 respectively.

The effects of the Greek debt problem triggered a 10% slump to £80 in Athens. However, despite similar economic difficulties, Dublin prices rallied 7% to £73, helped in part by the May 2011 visits of US President Barack Obama and the Queen which raised the profile of the city.

There were also significant price rises in the Baltic states with Increased demand from travellers searching for low cost destinations. Average room rates climbed in Lithuania by 14% to £55, in Estonia by 11% to £60 and in Latvia by 8% to £57.

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