The global hotel industry is showing solid signs of growth with average room rate rising by 6% to Â£107.74, according to a new survey by BTI UK.
But while average room rates rose across all star ratings, the survey found the highest increase (8.8%) was in the budget sector and the lowest in the four star market.
BTI said this was due to corporates' “preference to downgrade their accommodation as the budget sector continues to expand and upgrade and is in line with their policy requirements.”
But the five star market, after 18 months in decline, was also now showing signs of recovery.
This is forecast to continue as major developments are planned, particularly in the Asia Pacific and Middle East/West Asia regions.
In Europe, growth was particularly strong in the Eastern sector which had the highest regional rates increase of 27%.
This was in part due to rate rises in Moscow of 29% because of its increasing business development prospects and growing importance to business travellers.
This rate increase propelled Moscow to the top of the list of the world's most expensive cities with Paris dropping to fourth place but with London staying at seventh, despite a 6% rise.
Athens was a newcomer to the list but Zurich, Copenhagen, Frankfurt and Amsterdam dropped out of the top ten.
Margaret Bowler, BTI UK's general manager of hotel relations, said: “Overall the global hotel industry continues to show clear signs of recovery.”
But she warned that the “long held presumption that high volume equals low rate is no longer necessarily true in today's market and companies should look to their travel management company to provide guidance and quality data.”
She added: “It is likely that major hotel groups will be assessing client accounts not merely by potential volume, but also according to the profile of the account in terms of value.”
The survey is based on a combination of industry figures, actual room nights booked and rates paid by BTI clients during January – June (inclusive) 2005.