England: London hotels most expensive in the world

Sleep has become an exorbitantly expensive commodity at Britain's hotels.

Last night, a standard double room at a former London hospital was selling at 511 pounds (NZ$1400) per night - excluding breakfast.

The building overlooking Hyde Park is now the Lanesborough Hotel, and one of the priciest places to stay in Western Europe's most expensive capital for overnight guests.

The annual Hotel Price Index from the online agency, Hotels.com, surveys 20,000 hotels in 1000 locations.

It found the average nightly room rate in the capital in the last quarter of 2006 was $293.

For comparison, even in Oslo - capital of the richest country in Europe - an average double room in the city-centre can be found for 85 pounds($232).

Britain's national average is 98 pounds ($268).

"The UK remained the most expensive country in Europe during 2006," said Hotels.com marketing director Patrick Oqvist.

He said the survey demonstrated "the rising popularity of our cities as tourist destinations".

That growing attraction is partly due to Britain becoming the hub of the low-cost aviation industry.

For travellers in dozens of towns and cities across Europe, London is the only foreign capital accessible by air.

But when the new visitors touch down, they find a city that may prove ruinously expensive.

Last night, rooms at Malmaison in Clerkenwell were going for 254 pounds($695), making this boutique property one of the better value upmarket options in the capital.

A double room topped 400 pounds($1095) on Park Lane at the Four Seasons and the London Hilton.

The Mandarin Oriental in Knightsbridge was quoting walk-up customers a rate of 410 pounds ($1123) a night - still 101 pounds lower than its near neighbour, The Lanesborough.

Here, if two occupants sleep for eight hours each, every second of slumber costs one penny.

The cost of getting around London can add to the visitor's woes: in January, the cash fare to travel anywhere in central London on the Underground rose to 4 pounds($11), more than twice the price in any other city in the world.

While air-fares within Europe have approximately halved in the past decade, hotel rates have continued to rise: by 17 per cent last year alone, according to the survey.

Some observers expected the price-comparison potential of the internet to depress room rates, as prospective guests shopped around for the best value.

But despite the success of sites such as Hotels.com, Laterooms.com and Opodo.co.uk, rates appear remarkably robust.

The key measure in the hotel business is revenue per available room, or RevPAR.

In London it is at an all-time high.

After the bombings in the capital in July 2005, some feared that earnings would go into decline.

In fact, the opposite has happened; during 2006, Hotels.com reports that London hotel rates increased by 22 per cent, with occupancy rates high.

The gains currently being made will entice investors into the new-build hotel market, and work is already under way on a number of sites in London; speculators also have half an eye on the 2012 Olympics.

Yet building appears not to be keeping pace with demand.

The result: London has a chronic shortage of beds.

It shares this characteristic with Paris, the most expensive Continental capital with an average nightly rate of 96 pounds ($263).

Just behind Paris is Edinburgh, where the average guest paid 95 pounds ($260) for a double room.

Other Scottish cities saw sharp escalations in rates, with Aberdeen prices rising by 13 per cent to 91 pounds ($241) and Glasgow showing an increase of one-sixth to £75 ($205).

Scotland's largest city, though, remains 30 per cent cheaper than England's.

Yet London does not have the most expensive hotels in Britain.

That dubious honour goes to Bath, where the nightly average is 114 pounds.

Last year, the long-awaited Thermae Bath Spa finally opened, adding to demand from well-heeled visitors.

Last night a double room at the upmarket Tasburgh House Hotel in Bath was selling just below the average, at 110 pounds ($301) including Continental breakfast.

The proprietor, Sue Keeling, said, "If you want the best quality and the most romantic and memorable places to stay, it doesn't come cheap.

As long as we're able to offer the quality that goes with the cost, surely it's worth it."While buoyant rates across Britain are good news for hoteliers and their staff, there is a longer-term danger that Britain will acquire a reputation as an ultra-high-cost country.

Already there are signs that Chinese visitors - whose currency is tied to the weak US dollar - are forsaking Britain for continental Europe.

The world's biggest spenders, in terms at least of hotels, are now the Russians.

The average rate paid at city hotels worldwide by Russian citizens is 106 pounds ($290).

Second place is shared by the British and the Irish, who pay an average of 87 pounds($238) for a double room.

The global bargain-hunters are the Germans, who manage to pay an average of just 73 pounds ($200).

Budget travellers should steer clear of Moscow, which remains the most expensive city in the world.

An average double room costs 172 pounds ($471), with the new Ritz-Carlton quoting a "rack rate" of 490 pounds ($1343).

In second place is New York, at 155 pounds ($425).

Dubai's shortage of hotel rooms is reflected in a nightly average rate of 124 pounds ($340).

The world's cheapest city for classy hotels is Bangkok, at 44 pounds ($120) a night.

Closer to the UK, the Estonian capital, Tallinn, has seen rates actually fall in the past year - and is now the most economical European city for a comfortable stay, at an average of 51 pounds($140) a night.

Travellers could stay 10 nights in Tallinn for the price of one night at London's Lanesborough.

Budget travellers to London, meanwhile, should fare better from next month when the Youth Hostels Association re-opens its Earl's Court property with 170 beds.

Stelios Haji-Ioannou opened his first easyHotel in west London in 2005, and last night a standard double room was on offer at 50 pounds($137).

And at Europe's biggest backpacker hostel, the Generator near Russell Square, beds were available for just 17 pounds ($46).

- INDEPENDENT