Singapore remains Top 15 most expensive city for hotel rooms

While Hong Kong slides from 4th to 11th.

But overall in Asia Pacific, the hotel industry remains resilient with an overall increase in average room rates (ARR) from 2012, according to the latest interim Hotel Survey from international corporate services company Hogg Robinson Group (HRG).

Average room rates (ARR) have increased in [31/35] out of the top 50 cities, where Singapore saw a 4% growth in ARR in terms of GBP.

Margaret Bowler, Director, Global Hotel Relations at HRG comments: "The early sign of recovery in hotel prices is encouraging, what is a surprise however is that in certain key cities the rates are not as high as the market had expected – in many cities this is attributed to new supply. 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."

Margaret Bowler continues: "Once again we can see from the survey that regional trends are becoming less relevant than they were four years ago, with significant variance across regions. Interestingly the survey also shows the rise and rise of the megacity - 11 of the top 50 cities by room rate are also classified as megacities – and we are clearly beginning to see some marked differences between these and other cities that are popular business destinations."

"The megacities are all showing strong growth driven by a number of common features. Megacities benefit from a combination of classic business travel and high conference and exhibition traffic. They also boast a good market for tourism and have specialised centres for industry segments such as oil and gas for instance. With the advantage of being able to cater for a variety of requirements, megacities can attract a more diverse range of business."

Despite Singapore and Hong Kong not being megacities, their positions within the top 20 most expensive hotel room cities were maintained.

"In comparison, other cities that are simply popular business destinations are subject to the general trend of the market and the consequences of wider economic pressures that would influence fluctuations in demand for example. Some of the city positions in the top 50 league table reflect capacity and the availability of room space; limited new openings result in higher room rates (Moscow for example) whilst a number of new hotel developments results in a competitive rate market (as seen in Abu Dhabi)," said Bowler.

"Clients need to be aware of the rise and rise of the megacity and the impact this growth pattern and dynamic has on their hotel spend," she added.

"Whilst not uniform, the increase in average room rate highlights that travel remains an important part of winning and conducting business. However, the below expectation increase in ARR is not likely to last and we expect to see further ARR growth into the second half of the year, and an interesting 2014 RFP season," she said further.

Here are the key Asia Pacific key market trends cited in the survey:

Tokyo continues to do well, however that majority of the growth seen locally had been driven by a large shift in the exchange rate with GBP only moving a modest 1.4%. The movement of the pound against the Yen has been favourable to UK based business travellers.

Singapore saw a 4% growth in GBP but this was wiped out by exchange rate movements and so locally the city remains flat in terms of ARR.

India is showing signs of ARR picking up, although in many cases this was helped by the favourable exchange rate. However real growth was seen in Mumbai and Bangalore driven by a lack of new openings in Bangalore, and lots of new demand from the outsourced IT sector and in Mumbai by growth in the SME sector using best available rates. Indian inflation is also running at approximately 7% per annum with hotels regularly seeing 3-5% increases in negotiated rates (Indian CPI).

India is seeing a return to growth, especially in those cities which are also seeing growth in the outsourced IT sector and SME business.