UK hotel prices fall, but 14% higher year-on-year
The majority of UK cities experienced a fall in hotel prices this month. London dropped fourteen percent from December to 130 pounds per night for a standard double room – its lowest point since August 2010. Manchester also experienced a significant decline in overnight costs, falling 17% to 81 pounds. Other cities with reduced hotel rates this month include Edinburgh (88 pounds, -12%), Leeds (67 pounds, -11%), Glasgow (71 pounds, -8%) and Blackpool (62 pounds, -7%). The only cities with rising hotel prices were Cardiff (up 12 percent to 71 pounds), Birmingham (up 10 percent to 71 pounds), and Liverpool (up 8 percent to 86 pounds).

Nevertheless, a comparison with price data for January 2010 shows that UK hotel prices are significantly higher than a year ago, with a year-on-year increase of fourteen percent. Accommodation costs in the capital are 20% higher than last January’s average of 109 pounds, and the same is true in Sheffield (up 20%), Blackpool (up 21%), Liverpool (up 23%) and Newcastle (up 27%). Overnight costs in Edinburgh and Manchester are 9% higher than a year ago, while Glasgow is up six percent. The only city to experience a decline in prices is Bristol, where average hotel prices are down 3% to 84 pounds.

VAT increase has negligible impact on online hotel prices
The introduction of the VAT surcharge on January 4th, 2011, raising the national VAT from 17.5% to 20%, has resulted in a barely discernable upward momentum of online hotel prices. The impact on the consumer side is for the most part negligible, however, as the additional 2.5% charge has little effect on budget accommodation and B&Bs, and even in the case of luxury hotels amounts to only a few extra pounds per night.

Europe: Italy and France significantly more expensive
While average prices in Ireland, Denmark and Austria have seen important price declines in comparison to last month (-12%, -10%, and -9% respectively), average accommodation costs in France (116 pounds, +31%), Switzerland (165 pounds, +17%) and Italy (92 pounds, +12%) have soared. In Paris, a night in a standard double room costs 125 pounds (up 5%), while a similar room in Lyon costs 101 pounds (up 10%) and in Cannes, 98 pounds (up 20%). Prices in Geneva have risen to 178 pounds – a 13% increase that brings the city’s average to its second highest price point in over a year. More favourable destinations for January city breaks are Brussels, down 10 percent to 89 pounds per night, and Barcelona, which has fallen 13 percent to 81 pounds per night.

The trivago.co.uk hotel price index shows the average overnight accommodation prices for the most popular European cities on trivago. Prices for a standard double room are calculated on the basis of 160,000 daily price inquiries for overnight hotel stays generated through the trivago hotel price comparison service. trivago stores all hotel enquiries for each month and therefore gives an overview of hotel accommodation prices for the upcoming month. The tHPI reflects the hotel prices within the European online hotel market: The overnight accommodation prices of 53 online travel agents and hotel chains create the average hotel prices for cities, regions and countries within Europe.