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THE HOTEL PRICE INDEX Overview of hotel prices in 2009

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The Hotels.com Hotel Price Index (HPI®) is a regular survey of hotel prices in major destinations across the world. The HPI® is based on bookings made on Hotels.com and prices shown are those actually paid by customers (rather than advertised rates) in 2009.

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Page 1: Hotel Price Index

THE HOTEL PRICE INDEXOverview of hotel prices in 2009

Page 2: Hotel Price Index

The Hotels.com Hotel Price Index (HPI®) is a regular survey of hotel prices in major destinations across the world. The HPI® is based on bookings made on Hotels.com and prices shown are those actually paid by customers (rather than advertised rates) in 2009.

Now in its seventh year, the HPI® is respected as the definitive report on hotel prices paid around the world and increasingly used as a reference tool by media, analysts, tourism bodies and academics.

• The HPI® tracks the real prices paid per room by Hotels.com customers around the world using a weighted average based on the number of rooms sold in each of the markets that Hotels.com operates in.

• Approximately 94,000 properties in more than 16,000 locations make up the sample set of hotels from which prices are taken.

The international scale of Hotels.com (in terms of both customers and destinations) makes the Hotel Price Index one of the most comprehensive benchmarks available, as it incorporates both chain and independent hotels, as well as options such as self-catering and bed and breakfast properties.

In Europe, approximately 25% of hotel rooms are part of a chain, the remainder being independent. The reverse is true of the US, in which approximately 70% of hotel rooms booked are in chain properties. In addition to the standard survey, the HPI® includes occasional features on new or unusual booking and pricing trends.

Introduction

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1The Hotel Price Index Review of hotel prices in 2009

Foreword by David RochePresident of hotels.com

Step inside the time machine…

Step inside the time machine, turn the dial back to 2003, and compare hotel prices then and now. What’s changed? Not much. Our latest Hotel Price Index, covering all of 2009, shows that prices fell globally by 14% on already weak 2008 figures, bringing consumer prices back to levels not seen since 2003. The rate of decline grew less steep over the year – from 16% down in Q1 to 7% down in Q4 – essentially the only silver lining for hoteliers in what was a very bad year for the industry.

Underlying this trend are some basic economics. Supply is still rising – there were 4000 hotel rooms added in Manhattan in just 12 months. Demand is falling, hit by a severe reduction in business travel and weaker consumer spending. The result: unprecedented falls in hotel prices.

Digging deeper into the data, we can see many new trends emerging. Domestic tourism offset the losses for some destinations as travellers decided to explore their home turf. Visitor numbers to New York were down just 3.9% in 2009 instead of the expected 5%-10% as the Big Apple became more affordable and accessible than ever before for domestic American travellers. London drew record numbers of Middle Eastern visitors who enjoyed five star hotels for longer periods. And Monte Carlo became the most expensive destination in the world, outranking heavyweight cities that have previously held the most expensive crown like Moscow, Dubai and New York.

While 2009 turned out to be the year of the deal, some cities did see the actual prices paid by travellers rise. Sometimes explained by currency movements, the rises were also a result of people paying a little more to move up a star rating. The gap in price between 3, 4 and 5 star hotels narrowed in 2009, meaning travellers could trade up and enjoy luxury for less than ever before. Some destinations benefitted from the currency fluctuations, such as London, for example, which saw an influx of visitors taking advantage of the cheaper Pound. Occupancy rates in the British capital stood at a very healthy 82.9% at the end of the year.

2010 looks set to be the year when hotel prices stop falling, but despite some early indications of recovery (in occupancy mainly) in Q4 2009, few hoteliers expect any significant price rises. The traveller is set fair then for another year of extraordinary value. Just climb inside your time machine and see.

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In the HPI® report, we focus on two main sources of data:

The first section (chapter 1) shows the global Hotel Price Index up to and including Q4 2009.

The Index is compiled from all relevant transactions on Hotels.com, in local currency, weighted to reflect the size of each market. By representing hotel price movements in an index, Hotels.com can illustrate the actual price movements as experienced by consumers without foreign exchange fluctuations distorting the picture.

The Index was started in 2004 at 100, and includes all bookings across all star ratings.

The report compares prices paid in the whole of 2009, with prices paid in the same period the year before, thereby removing the effect of seasonality.

The second section (chapters 2-8) shows hotel prices across the world as paid by U.S. travelers in U.S. Dollars. This shows the changes in real prices paid by consumers, reflecting both movements in exchange rates and hotel pricing. The prices shown are average prices paid by travelers in the whole of 2009.

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In this issue

1. Global price changes in the first half of 2009 Overall

By region

2. Price changes in global city destinations Prices across the world’s top cities

Most expensive destinations

Highest price rises and falls

3. City focus sections New York

London

Eastern Europe

Dubai

Beijing & Shanghai

4. U. S. hotel prices per state Average prices for states

The greatest declines among states

5. U.S. city prices Average prices for U.S. cities

The most expensive U.S. cities

The least expensive U.S. cities

6. Caribbean and Latin American destinations

7. European city destinations

8. Travel habits Top U.S. destinations for U.S. travelers

Top international destinations for U.S. travelers

Top U.S. destinations for international travelers

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1. Global price changes

The average price of a hotel room was 14% cheaper in 2009 than in 2008, according to the Hotels.com Hotel Price Index (HPI®).

In fact, a hotel room was cheaper in 2009 than it was in 2004, when the HPI® began.

Rooms cost 13% less in Europe during 2009 than in 2008, 14% less in the U.S, 16% less in Asia and 21% less in Latin America.

However, towards the end of 2009, the price falls started to level off. The average price of a hotel room fell by just 7% year-on-year in Q4 2009, compared to 14% in Q3, 17% in Q2 and 16% in Q1.

Hoteliers will be heartened that the market was showing signs of stabilising by the end of 2009, however, hotels around the world were still offering great value for travelers.

Figure 1 HPI® quarterly breakdown for average annual prices paid 2004 to 2009

2004

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2004

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Figure 2 HPI quarterly breakdown Q1 2004 to Q4 2009

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Asia EuropeCaribbean Latin America ROW North America

Figure 3 HPI by quarter, by region, Europe, N. America, Asia, the Rest of the World 2004 to Q4 2009

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6 The Hotel Price Index Review of hotel prices in 2009

North American prices fall in 2009 but is an end in sight for hoteliers?

• Prices paid by travelers for hotel rooms in North America (the U.S. and Canada) fell 7% between Q4 2008 and Q4 2009.

• Falling hotel prices across North America reflect the impact of the economic slowdown and the reduction in demand for hotel rooms this caused. The lower number of overseas tourists to the U.S. plus dampened domestic demand contributed to falling occupancy and hotel prices.

• However, there was a slowdown in the rate of price cuts as 2009 progressed. Prices dropped by 16% y-o-y in Q1, 17% y-o-y in Q2 and 13% y-o-y in Q3.

• Prices for hotels in the Caribbean fell by 2% year-on-year during Q4 2009.

• Prices across Latin America fell furthest and fastest in the Americas at the end of last year. They slumped by 10% in Q4 2009 when compared to the same period the previous year.

European price falls lessen as 2009 progresses

• Prices paid by travelers for hotel rooms in Europe fell by 6% between Q4 2009 and Q4 2008 as hoteliers cut their prices in an effort to stimulate occupancy rates during the winter season and the downturn.

• The rate at which hotel prices fell slowed in Q4, offering some relief to hoteliers. Prices had dropped by 14% year-on-year in Q3, by 16% in Q2 and by 15% in Q1 2009.

• The Hotel Price Index for Europe fell to 96 in Q4 2009 – down from 102 a year before: a stark illustration of how sharply hoteliers had to cut prices to create attractive offers for travelers.

• Hotel rooms are now 4% cheaper across Europe than they were in 2004, when the Hotel Price Index was started.

Asia – last into the crisis and last out?

• According to the Hotel Price Index, Asian hotels are still experiencing the effects of the downturn – and remained hard-hit by falling prices in Q4 2009.

• Prices in Asian hotels – which had held up longer than those in the U.S. or Europe – continued to tumble in Q4 2009, falling 19% when compared to the same period one year earlier.

• Unlike other regions, the levels of falls experienced by Asian hotels accelerated in Q4 2009 compared to the previous periods whilst the rate of decline slowed in every other part of the world.

• The 19% drops experienced in Q4 2009 were steeper than the 17% y-o-y falls experienced in the second and third quarters and the 15% y-o-y fall in Q1 2009.

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This section (and those that follow) reflects the real US$ prices paid by travelers from the U.S. in 2009 – compared to prices paid in US$ during 2008.

With just a very few, isolated exceptions, worldwide hotel prices dropped substantially for U.S. travelers during 2009, the Hotels.com Hotel Price Index found. Indeed, of the tens of major city destinations analysed by Hotels.com, just five cities showed increases in average prices in 2009 (when compared to 2008).

Hotel prices on the Italian island of Capri, which was the most expensive “city” destination worldwide for U.S. travelers, were some of the few to see average rises year-over-year, up 21 percent on average. With U.S. travelers paying $302 per night for a room on the honeymoon hideaway, it became the world’s most expensive major destination.

With the exception of Rio De Janeiro, all of the other top-10 most expensive cities worldwide for U.S. travelers saw prices fall. In Geneva, which became the second most expensive for travelers, they were down by some 19% to average $249 per night.

The Middle East centre of Abu Dhabi came third in the table, as prices averaged $242 over 2009. A high proportion of higher-end accommodation and relatively constrained hotel supply combined to keep hotel prices comparatively high, although these factors were not enough to prevent average prices paid dropping by 17 percent year-over-year.

Closer to home, New York was the most expensive domestic city of those tracked in the global list, with prices averaging $199 during 2009 – a fall of almost a quarter (24 percent) compared to 2008. A sharp decline in convention and groups business was one factor contributing to the substantial price drop in this market.

Moscow experienced the steepest contraction in hotel prices – they fell by 44 percent between 2008 and 2009, which meant that it dropped to sixth place globally as prices averaged $216 – down from $387 a year before when it had been the world’s most expensive destination.

2. Price changes in global city destinations

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8 The Hotel Price Index Review of hotel prices in 2009

Figure 4 Average hotel prices for the first six months of 2009, compared to the same period in 2008

City

Average price per room per night

2009

Average price per room per night

2008Percent change year-over-year City

Average price per room per night

2009

Average price per room per night

2008Percent change year-over-year

Capri $302 $250 21% Salzburg $146 $181 -19%Geneva $249 $307 -19% Singapore $145 $201 -28%Abu Dhabi $242 $290 -17% Washington, D.C. $144 $161 -11%Cannes $235 $284 -17% Bali $142 $141 1%Venice $216 $260 -17% Brussels $142 $173 -18%Moscow $216 $387 -44% Vienna $141 $189 -25%Dubrovnik $203 $234 -13% Vancouver $140 $163 -14%New York $199 $262 -24% Miami $140 $162 -14%Paris $193 $224 -14% Madrid $139 $175 -21%Rio De Janeiro $192 $175 10% Seoul $138 $151 -9%London $185 $226 -18% Chicago $138 $169 -18%Dubai $185 $248 -25% Seville $137 $177 -23%Zurich $185 $217 -15% Montreal $136 $152 -11%Rome $184 $220 -16% New Delhi $136 $190 -28%Copenhagen $183 $229 -20% Acapulco $134 $151 -11%Jerusalem $173 $165 5% Lisbon $134 $165 -19%Milan $172 $213 -19% Taipei $133 $180 -26%Kyoto $169 $196 -13% Sydney $131 $160 -18%Johannesburg $169 $209 -19% Cape Town $130 $133 -2%Oslo $169 $227 -25% Reykjavik $129 $163 -21%St Petersburg $168 $225 -25% Berlin $128 $158 -19%Istanbul $167 $176 -5% San Francisco Bay Area $127 $153 -17%Amsterdam $161 $207 -22% Hong Kong $125 $157 -20%Cancun $161 $210 -23% Dublin $122 $167 -27%Edinburgh $160 $213 -25% Los Angeles $119 $134 -12%Mumbai $160 $234 -32% Budapest $118 $155 -24%Barcelona $160 $212 -25% Buenos Aires $114 $142 -20%Honolulu $160 $181 -12% Beijing $109 $152 -29%Florence $159 $201 -21% Shanghai $108 $126 -14%Boston $158 $183 -14% Melbourne $107 $110 -3%Athens $159 $185 -14% Mexico City $106 $121 -13%Munich $157 $188 -16% Bangkok $100 $119 -16%Stockholm $157 $212 -26% Prague $100 $137 -27%Hamburg $154 $176 -13% Kuala Lumpur $99 $120 -18%Cairo $154 $178 -14% Manila $95 $109 -13%Santiago $149 $152 -2% Auckland $91 $120 -24%Frankfurt $149 $180 -17% Warsaw $89 $138 -35%Sao Paulo $148 $139 7% Las Vegas $85 $103 -18%Helsinki $146 $182 -20%

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The world’s most expensive cities

• The broad trend among the world’s most expensive cities was that average prices paid by travelers fell between 2008 and 2009. Eight of the world’s ten most expensive cities saw average prices drop.

• The list of most expensive destinations is dominated by major European destinations, suggesting that those U.S. travelers who can, are still willing to spend more on a longer break in Europe. Capri, Geneva, Cannes, Venice and Paris all feature in the top 10 expensive destinations.

• Joining these European centers are the new Middle East travel powerhouse of Abu Dhabi, which enjoyed a combination of business and leisure patronage from U.S. travelers during the first half of 2009. Dubai, however, dropped out of the top-10 most expensive centers following its financial collapse and the pressure of the economic slowdown.

Figure 5 The world’s most expensive cities in 2009, compared to 2008

CityAverage price per room

per night 2009Average price per room

per night 2008Percent change year-over-year

Capri $302 $250 21%Geneva $249 $307 -19%Abu Dhabi $242 $290 -17%Cannes $235 $284 -17%Venice $216 $260 -17%Moscow $216 $387 -44%Dubrovnik $203 $234 -13%New York $199 $262 -24%Paris $193 $224 -14%Rio De Janeiro $192 $175 10%

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The greatest price rises among the world’s top cities

• Prices in just five of the major global city destinations rose between year-over-year to 2009.

• As has been observed, prices in Capri were up thanks to its continuing allure for U.S. holidaymakers and its strong convention trade, which continues to attract business travelers for its globally significant events – most of which take place during the first half of the year.

• The Brazilian cities of Rio de Janeiro and Sao Paolo both saw average prices paid by U.S. travelers rise between 2008 and 2009 – by 10 percent and 7 percent, largely due to the strengthening of the Brazilian currency against the Dollar.

Figure 6 The biggest price rises in 2009, compared to 2008

CityAverage price per room

per night 2009Average price per room

per night 2008Percent change year-over-year

Capri $302 $ 250 21%Rio De Janeiro $192 $175 10%Sao Paulo $148 $139 7%Jerusalem $173 $165 5%Bali $142 $141 1%

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The greatest price falls among the world’s top cities

• Geopolitical and economic events continued to take their toll on two of the destinations that saw the steepest price falls between 2008 and this year.

• Prices in Moscow fell by some 44 percent year-over-year, which meant that a hotel room that would have cost a U.S. traveler $387 during the first six months of 2008 would have cost a traveler just $216 this year.

• The staggering drop in price is explained by a combination of the financial crisis taking its toll on the Russian center and business travel falling dramatically.

• Prices for hotels in the Indian city Mumbai continued to fall during 2009 (when compared to the same period a year before) as the terrorist attacks of November 2008 continued to deter tourists and business travel to the city was affected by the downturn – prices were down by 32 percent.

• Other cities to experience substantial falls included Warsaw (down 35 percent to $89) and Prague (down 27 percent to $100), the steepest price drop for a European city.

• Beijing, where prices dropped by 29 percent following peaks in 2008 when the city hosted the summer Olympics, saw prices average $109 in 2009 following highs of $152 a year before.

• It was international cities that saw the steepest falls in prices overall – with no U.S. city featuring in the list of top fallers – an indication that while the U.S. travel industry went into the downturn earlier and faster than some European countries, domestic hoteliers may be seeing the light at the end of the tunnel sooner than their European counterparts.

Figure 7 The biggest price falls in 2009, compared to 2008

CityAverage price per room

per night 2009Average price per room

per night 2008Percent change year-over-year

Moscow $216 $387 -44%Warsaw $89 $138 -35%Mumbai $160 $234 -32%Beijing $109 $152 -29%New Delhi $136 $190 -28%Singapore $145 $201 -28%Prague $100 $137 -27%Dublin $122 $167 -27%Taipei $133 $180 -26%Stockholm $157 $212 -26%

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Global hotel prices 2009

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Focus on New York

As hotel rates fell in New York in 2009, domestic and foreign visitors alike made the most of the great new promotions. The year began with room rates down sharply, with 4 star hotels leading the way with rate reductions. Soon, other hotels followed suit and from June onwards even five star hotels had great offers for summer travelers such as stay-three-pay-two-night offers.

Corporate travel was squeezed in 2009 meaning more good news for leisure travelers as mid-week rooms became more affordable and available. Tourists soon realised they could afford more for their money, and luxury hotels saw bookings rise accordingly. Travelers traded up but they also stayed longer as they really took advantage of their newfound spending power.

Savvy travelers, particularly from the domestic US market and Asia Pacific, took advantage of late deals and package promotions. Visitor numbers from Europe remained flat.

Plans for new hotel openings came to fruition in 2009 with 4000 rooms added on Manhattan in just 12 months. This meant visitors to the city had even more chance of finding a great value room. As 2009 came to a close, room rates started to recover, spelling better news for hoteliers if not travelers.

3 City focus sections

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Focus on London

Visitors to London enjoyed a year of great hotel deals in 2009 with rates at their lowest level for five years. Four-star hotels lowered their rates to the level of three-star properties and five star hotels had to offer great incentives to compete for custom. Free entry to most major museums and art galleries in the capital added to the city’s appeal.

Although the first six months of 2009 were tough for hoteliers, favorable exchange rates for US and European travelers helped the hotels fill their rooms in the latter part of the year. Visitors flocked from the Middle East and Europe to take advantage of the weakness of the Pound and enjoy the UK capital for less money than ever before. London also received a boost in numbers of domestic UK visitors as they chose to holiday at home where their money went further.

By November 2009, the year-on-year decline in room rates started to tail off, partly due to the fact that prices were already lower in November 2008. London hotel occupancy stood at a very healthy 82.9% by the end of the year, according to Deloitte.

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Focus on Eastern Europe

Travelers to Eastern Europe enjoyed record low rates in 2009 as hoteliers dropped prices dramatically in a bid to fill their rooms. Cities across Eastern Europe that rely heavily on business travelers suffered most in the downturn as companies cut travel budgets to rein in costs. Holiday destinations fared slightly better, though visitor numbers from the UK, usually a strong market, were down in 2009, as the recession encouraged people to holiday nearer home, the rise of the so-called ‘staycation’.

With declining oil prices and the economic slowdown, hoteliers in Moscow lowered their rates from the start of 2009. This decision to lower rates early in the year proved a good one as it meant that they managed to attract a steady number of visitors throughout the year and maintain occupancies.

It was a great year for visitors to Riga as hoteliers lowered prices dramatically to try to fill rooms. The opening of new hotels and the lack of any direct flights into Riga from major European capitals added to the challenge for hoteliers.

Bucharest and Warsaw both saw dramatic price drops in 2009 as their hotels rely heavily on business travelers.

Prices also fell in the holiday destinations of Tallinn, Budapest, Krakow and Prague. Visitor numbers to Prague remained high throughout the year, but a steady flow of new hotel openings meant 5-star hotels in particular had to compete for customers with increasingly attractive promotions. Visitor numbers to Tallinn fell in 2009 as a few major airlines stopped flying to the city. Its proximity to Helsinki though and its relative affordability for Finnish travelers, meant weekend business from Helsinki provided a much needed boost.

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Focus on Dubai

The Emirate city of Dubai lost some of its sparkle in 2009 as the economic slowdown affected the city and hotels were forced to lower their rates. Business travel and the convention industry, two important markets for Dubai hotels, were both affected by the downturn, meaning hoteliers had to look for new ways to fill their rooms. Rate cuts started from January onwards and by the middle of the year hotel prices were at a record low. While hotel construction slowed down, new hotels did continue to open, adding to the challenge of filling rooms.

By the Q3 2009, usually peak conference and exhibitions season, room rates in the city started to recover a little, however the expected post-Ramadan boost in visitor numbers didn’t materialise and in November it was further thwarted by negative news coverage surrounding Dubai’s economic problems.

The visitor profile to Dubai changed during 2009. While business and convention travel slowed down, the number of leisure travelers increased, taking advantage of the cut price luxury. The number of Italian and Scandinavian visitors grew as a result of direct flights into Dubai, while media promotions in Germany meant it, along with France, remained a strong market. The rate of growth in UK visitor numbers tailed off due to the recession, but domestic visitors from the local Middle Eastern market increased.

Dubai became more affordable in 2009, meaning its year-round sunshine and luxury hotels were accessible to an even wider audience.

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18 The Hotel Price Index Review of hotel prices in 2009

Focus on Beijing

Beijing offered great value for travelers in 2009. Room rates fell steeply by up to half the level they had been in 2008 when the city hosted the Olympics. The economic recession coupled with the tightening of visa restrictions and over-supply of rooms (20,000 new rooms were added in 2009) further fuelled the drop in hotel rates in the city.

The most dramatic falls were in the top end hotels with 4 and 5 star hotels competing for business. This was great news for visitors who could now afford to stay at the city’s fabulous hotels they could never before afford.

The low prices proved particularly attractive to travelers from Taiwan. The numbers of Taiwanese visitors to Beijing rose by 40% in the first half of 2009, compared to a year earlier. Mainland China became the first choice in Asia for travelers from Taiwan, trumping Japan and Hong Kong.

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19The Hotel Price Index Review of hotel prices in 2009

Focus on Shanghai

Hotels in Shanghai, the financial capital of China, fared rather better than in Beijing, with room rates dropping less steeply (by 14% on average). This is partly explained by the fact that rates were not as high as Beijing’s in 2008, as Shanghai did not host the Olympics.

In April 2009, Shanghai hosted the F1 Chinese Grand Prix which helped boost visitor numbers to the city. In the second half of the year business travel showed signs of recovery and the average occupancy for the year remained a fairly healthy 60-63%.

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20 The Hotel Price Index Review of hotel prices in 2009

4. U.S. Hotel prices per state

US travelers spent the most for a night in New York State during 2009, with prices averaging $197, despite prices falling 25 percent from 2008.

Massachusetts came in a distant second to New York, with hotels costing on average $152 per night during 2009 – a drop of 13 percent year-over-year.

Figure 8 Average hotel prices for 2009, compared to 2008 for U.S. states

State

Average price per room per night

2009

Average price per room per night

2008

Percent change year-

over-year State

Average price per room per night

2009

Average price per room per night

2008

Percent change year-

over-year

New York $197 $264 -25% Arizona $101 $116 -13%Massachusetts $152 $175 -13% Indiana $100 $107 -6%Hawaii $149 $171 -12% Wisconsin $99 $107 -8%Wyoming $139 $145 -4% Minnesota $97 $107 -9%Rhode Island $130 $147 -12% Tennessee $97 $106 -8%Illinois $128 $158 -19% Georgia $97 $109 -11%Vermont $123 $128 -4% New Mexico $97 $103 -6%Washington State $121 $139 -13% Utah $96 $106 -9%Alaska $119 $147 -19% Missouri $96 $101 -5%Maryland $119 $132 -10% West Virginia $96 $97 -2%Pennsylvania $119 $134 -11% Michigan $95 $101 -6%California $118 $138 -14% Alabama $95 $98 -3%Maine $116 $115 0% Nebraska $95 $97 -3%New Jersey $115 $135 -15% Kentucky $94 $99 -5%New Hampshire $114 $122 -6% North Carolina $93 $100 -6%Louisiana $113 $120 -6% South Dakota $93 $96 -2%Colorado $111 $124 -11% Iowa $90 $94 -4%Florida $110 $125 -12% Arkansas $89 $92 -2%South Carolina $109 $121 -10% Ohio $89 $96 -7%Delaware $109 $117 -6% Mississippi $89 $96 -8%Connecticut $109 $126 -13% Oklahoma $89 $92 -3%Virginia $109 $118 -8% North Dakota $88 $87 1%Texas $106 $117 -9% Kansas $86 $89 -3%Oregon $102 $113 -10% Idaho $83 $94 -12%Montana $101 $115 -12% Nevada $79 $96 -18%

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• Despite holding on to its position as the most expensive state in the U.S., New York experienced the greatest fall in prices of any state: prices were down by 25 percent year-over-year during 2009.

• Prices also fell dramatically in Alaska and Illinois – by 19 percent between 2008 and this year.

• The 18 percent drop in average prices in Nevada meant that it also became the cheapest state in the U.S. for hotel rooms as the average dipped to just $79 per night. Interestingly, the average room rate in Nevada and in Las Vegas both dropped by 18 percent.

Figure 9 Greatest price falls in 2009, compared to 2008, across the United States

CityAverage price per room

per night 2009Average price per room

per night 2008Percent change year-over-year

New York $197 $264 -25%Alaska $119 $147 -19%Illinois $128 $158 -19%Nevada $79 $96 -18%New Jersey $115 $135 -15%California $118 $138 -14%Connecticut $109 $126 -13%Massachusetts $152 $175 -13%Arizona $101 $116 -13%

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Average Hotel prices in US in 2009, compared to 2008

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Due to the huge range of properties and destinations that hotels.com offers across the United States, we cannot include commentary and insight into every U.S. city destination in this report. If you have specific questions about the data reported here, please refer to the contact information on page 34 of this document.

State

Average price per room per night

2009

Average price per room per night

2008

Percent change year-

over-year

Albany, NY $122 $121 0%Albuquerque, NM $101 $106 -5%Anchorage, AK $126 $153 -18%Atlanta, GA $100 $110 -10%Augusta, GA $98 $108 -9%Austin, TX $117 $124 -6%Baltimore, MD $117 $137 -15%Bangor, ME $118 $109 8%Baton Rouge, LA $105 $117 -10%Biloxi, MS $100 $110 -9%Birmingham, AL $96 $102 -5%Boise, ID $81 $90 -10%Boston, MA $158 $183 -14%Buffalo, NY $111 $111 0%Bozeman, MT $111 $139 -20%Casper, WY $98 $101 -2%Champaign & Springfield – Decatur, IL $88 $87 1%

Charleston, SC $124 $133 -7%Charlotte, NC $97 $107 -9%Chattanooga, TN $90 $91 -1%Cheyenne, WY $108 $105 3%Chicago, IL $137 $167 -18%Cincinnati, OH $98 $100 -3%Cleveland, OH $90 $101 -11%Colorado Springs, CO $84 $89 -5%Jefferson City, MO $84 $82 3%Columbia, SC $85 $90 -5%Columbus, OH $93 $96 -3%Dallas – Ft. Worth, TX $102 $113 -9%Dayton, OH $83 $79 5%Denver, CO $119 $132 -10%Des Moines, IA $93 $97 -4%Detroit, MI $97 $105 -8%El Paso, TX $87 $94 -8%Eugene, OR $96 $103 -7%Fargo, ND $87 $84 3%Fresno, CA $114 $122 -6%Ft. Myers, FL $131 $148 -12%Grand Rapids, MI $96 $94 3%Green Bay, WI $100 $102 -2%Hartford, CT $111 $127 -13%Honolulu, HI $160 $181 -12%Houston, TX $113 $123 -8%Indianapolis, IN $103 $113 -8%Jackson, MS $84 $86 -2%

State

Average price per room per night

2009

Average price per room per night

2008

Percent change year-

over-year

Jacksonville, FL $98 $107 -8%Juneau, AK $126 $158 -20%Kansas City, MO $96 $101 -5%Knoxville, TN $85 $92 -7%Lansing, MI $101 $101 0%Las Vegas, NV $85 $103 -18%Lexington, KY $91 $95 -4%Lincoln, NE $87 $86 1%Little Rock, AR $91 $95 -3%Los Angeles, CA $119 $134 -12%Louisville, KY $99 $102 -3%Madison, WI $96 $100 -5%Memphis, TN $104 $113 -8%Miami, FL $140 $162 -14%Milwaukee, WI $107 $118 -9%Minneapolis – St. Paul, MN $98 $110 -10%

Montgomery, AL $78 $83 -6%Myrtle Beach, SC $115 $128 -10%Nashville, TN $104 $114 -9%New Orleans, LA $122 $129 -6%New York, NY $199 $262 -24%Norfolk, VA $113 $117 -4%Oklahoma City, OK $92 $94 -2%Omaha, NE $100 $102 -2%Orlando, FL $93 $106 -12%Palm Springs, CA $127 $140 -9%Panama City, FL $147 $155 -5%Philadelphia, PA $127 $146 -13%Phoenix, AZ $101 $115 -12%Pittsburgh, PA $122 $129 -5%Portland, OR $105 $114 -8%Providence, RI $126 $138 -9%

Raleigh – Durham, NC $91 $96 -5%

Reno, NV $83 $90 -8%Richmond, NV $95 $98 -3%Rochester, NY $108 $114 -5%Sacramento, CA $102 $110 -7%Salt Lake City, UT $99 $108 -8%San Antonio, TX $116 $132 -12%San Diego, CA $127 $154 -18%

San Francisco Bay Area, CA $127 $153 -17%

Santa Barbara, CA $148 $161 -8%Savannah, GA $104 $113 -8%

Figure 10 Average hotel prices for 2009, compared to 2008 for U.S. cities

5. U.S. City prices

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25The Hotel Price Index Review of hotel prices in 2009

State

Average price per room per night

2009

Average price per room per night

2008

Percent change year-

over-year

Seattle, WA $129 $150 -14%Shreveport, LA $92 $95 -3%Sioux City, IA $82 $77 7%Sioux Falls, SD $86 $89 -3%Spokane, WA $100 $102 -2%St. Louis, MO $101 $105 -4%Syracuse, NY $108 $111 -3%Tallahassee, FL $88 $91 -3%Tampa, FL $111 $125 -11%

State

Average price per room per night

2009

Average price per room per night

2008

Percent change year-

over-year

Toledo, OH $89 $93 -4%Topeka, KS $87 $89 -2%Tucson, AZ $99 $115 -13%Tulsa, OK $86 $91 -6%Washington, D.C. $144 $161 -11%Wichita, KS $86 $87 -2%Scranton, CT $109 $112 -3%Wilmington, DE $102 $108 -5%Yuma, AZ $86 $86 -1%

Figure 10 Average hotel prices for 2009, compared to 2008 for U.S. cities cont.

State

Average price per room per night

2009

Average price per room per night

2008

Percent change year-

over-year

New York, NY $199 $262 -24%Honolulu, HI $160 $181 -12%Boston, MA $158 $183 -14%Santa Barbara, CA $148 $161 -8%Panama City, FL $147 $155 -5%Washington, D.C. $144 $161 -11%Miami, FL $140 $162 -14%Chicago, IL $137 $167 -18%

State

Average price per room per night

2009

Average price per room per night

2008

Percent change year-

over-year

FT. Myers, FL $131 $148 -12%Seattle, WA $129 $150 -14%Philadelphia, PA $127 $146 -13%

San Francisco Bay Area, CA $127 $153 -17%

Palm Springs, CA $127 $140 -9%San Diego, CA $127 $154 -18%Providence, RI $126 $138 -9%

Figure 11 Highest prices in 2009 across major U.S. cities

State

Average price per room per night

2009

Average price per room per night

2008

Percent change year-

over-year

Macon, GA $75 $76 -1%Jackson, TN $76 $77 -2%Montgomery, AL $78 $83 -6%Laredo, TX $79 $86 -8%Amarillo, TX $80 $80 0%

State

Average price per room per night

2009

Average price per room per night

2008

Percent change year-

over-year

Boise, ID $81 $90 -10%Sioux City, SD $82 $77 7%Reno, NV $83 $90 -8%Dayton, OH $83 $79 5%Jackson, MS $84 $86 -2%

Figure 12 Lowest prices in 2009 across major U.S. cities

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State

Average price per room per night

2009

Average price per room per night

2008

Percent change year-

over-year

Bangor, ME $118 $109 8%Sioux City, SD $82 $77 7%Dayton, OH $83 $79 5%Cheyenne, WY $108 $105 3%Jefferson City, MO $84 $82 3%Fargo, ND $87 $84 3%

State

Average price per room per night

2009

Average price per room per night

2008

Percent change year-

over-year

Grand Rapids, MI $96 $94 3%Rochester, NY $98 $96 2%

Champaign & Springfield – Decatur, IL

$88 $87 1%

Lincoln, NE $87 $86 1%

Figure 13 Highest price rises in 2009 compared to a 2008 across major U.S. cities

State

Average price per room per night

2009

Average price per room per night

2008

Percent change year-

over-year

New York, NY $199 $262 -24%Bozeman, MT $111 $139 -20%Juneau, AK $126 $158 -20%Anchorage, AK $126 $153 -18%Chicago, IL $137 $167 -18%Las Vegas, NV $85 $103 -18%San Diego, CA $127 $154 -18%

San Francisco Bay Area, CA $127 $153 -17%

Baltimore, MD $117 $137 -15%Boston, MA $158 $183 -14%

State

Average price per room per night

2009

Average price per room per night

2008

Percent change year-

over-year

Miami, FL $140 $162 -14%Seattle, WA $129 $150 -14%Hartford, CT $111 $127 -13%Philadelphia, PA $127 $146 -13%Tucson, AZ $99 $115 -13%FT. Myers, FL $131 $148 -12%Honolulu, HI $160 $181 -12%Los Angeles, CA $119 $134 -12%Orlando, FL $93 $106 -12%Phoenix, AZ $101 $115 -12%

Figure 14 Greatest price falls in 2009 compared to 2008 across major U.S. cities

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The major Caribbean destinations dominate the table of the most expensive destinations across the region as a whole.

The most expensive destinations across the region include locations in the Bahamas, Bermuda, Turks and Caicos and U.S. Virgin Islands. These areas all include higher-end hotels and resorts attracting travelers focused on luxury. As these travelers are willing to pay for lavish vacation experiences, the properties are able to maintain high prices.

Average prices for hotels in resort markets in Mexico and Costa Rica are skewed by the growing prevalence of all-inclusive properties. Rates for these properties include accommodation, as well as meals, gratuities and taxes.

City CountryAverage price per room

per night 2009Average price per room

per night 2008Percent change year-over-year

Paradise Island Bahamas $378 $396 -4%Paget Bermuda $320 $319 0%Hamilton Bermuda $292 $341 -14%Providenciales Turks And Caicos Islands $290 $293 -1%Oyster Pond Netherlands Antilles $265 $234 13%Southampton Bermuda $258 $411 -37%Higuey Dominican Republic $243 $218 11%Palm Beach Aruba $239 $253 -6%Charlotte Amalie Us Virgin Islands $237 $285 -17%Cable Beach Bahamas $235 $216 9%Rose Hall Jamaica $225 $261 -14%Punta Cana Dominican Republic $216 $254 -15%Riviera Maya Mexico $214 $248 -14%Maho Beach Netherlands Antilles $205 $206 -0%Oranjestad Aruba $200 $191 5%Los Cabos Mexico $199 $231 -14%St Thomas Us Virgin Islands $196 $217 -10%Rio De Janeiro Brazil $192 $175 10%Montego Bay Jamaica $189 $160 18%Lucaya Bahamas $184 $176 4%Philipsburg Netherlands Antilles $182 $202 -10%Manuel Antonio Costa Rica $181 $170 6%La Romana Dominican Republic $179 $197 -9%Nassau Bahamas $175 $159 10%Cartagena Colombia $174 $181 -4%Kingston Jamaica $174 $205 -15%Christiansted Us Virgin Islands $172 $176 -2%Christ Church Barbados $167 $166 0%Manzanillo Mexico $164 $196 -16%Ixtap Zihuatanejo Mexico $163 $181 -10%Lima Peru $162 $158 2%Castries St. Lucia $161 $204 -21%Cancun Mexico $161 $210 -23%Huatulco Mexico $157 $177 -11%Boca Chica Dominican Republic $157 $178 -12%Ocho Rios Jamaica $155 $182 -15%Bogota Colombia $153 $178 -14%

Figure 15 Prices across major Caribbean and Latin American destinations in 2009, compared to 2008

6. Caribbean and Latin American destinations

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City CountryAverage price per room

per night 2009Average price per room

per night 2008Percent change year-over-year

Tamarindo Costa Rica $152 $160 -5%Salvador Brazil $151 $135 12%Fortuna Costa Rica $149 $150 -0%Vallarta Mexico $149 $174 -15%Santiago Chile $149 $152 -2%Sao Paulo Brazil $148 $139 7%Cozumel Mexico $148 $176 -16%Willemstad Netherlands Antilles $147 $193 -24%Basseterre St. Kitts & Nevis $146 $162 -9%Oaxaca Mexico $140 $213 -34%Puerta Plata Dominican Republic $140 $148 -5%Simpson Bay Netherlands Antilles $135 $139 -3%Guayaquil Ecuador $134 $142 -5%Acapulco Mexico $134 $151 -11%San Antonio, Belen Costa Rica $134 $142 -5%Miraflores Peru $133 $145 -9%Negril Jamaica $131 $151 -13%Freeport Bahamas $128 $100 28%Cusca Peru $126 $113 12%Gros Islet St. Lucia $121 $124 -3%Buenos Aires Argentina $114 $142 -20%Quito Ecuador $113 $142 -21%Santo Domingo Dominican Republic $110 $127 -14%Mexico City Mexico $106 $121 -13%Mazatlan Mexico $103 $130 -21%Merida Mexico $102 $128 -20%San Jose Costa Rica $100 $111 -10%Leon Mexico $99 $144 -31%La Paz Mexico $99 $112 -11%Queretaro Mexico $98 $119 -17%Veracruz Mexico $96 $114 -16%Guadalajara Mexico $91 $108 -16%Tijuana Mexico $87 $106 -19%Puebla Mexico $85 $110 -22%Monterrey Mexico $83 $108 -23%Ciudad Juarez Mexico $70 $84 -17%

Figure 15 Prices across major Caribbean and Latin American destinations in 2009, compared to 2008 cont.

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Top U.S. destinations for U.S. travelers

Las Vegas topped American travelers’ list as the most popular domestic city destination according to the hotels.com Hotel Price Index.

New York came in at number two in the list with Orlando in third place.

Chicago and Los Angeles made up the remainder of the top-five most popular domestic destinations for American travelers.

Figure 17 Top U.S. destinations for domestic U.S. travelers

Rank City

1 Las Vegas2 New York3 Orlando4 Chicago5 Los Angeles 6 San Francisco7 San Diego8 Miami9 Boston10 Atlanta 11 San Antonio12 Seattle13 Houston14 New Orleans15 Dallas16 Denver17 Washington 18 Fort Lauderdale19 Philadelphia20 Anaheim

8. Travel habits

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Top overseas destinations for U.S. travelers

Toronto was the most popular destination for U.S. travelers in 2009. In fact, Canadian cities dominate the top-five list with Vancouver and Niagara Falls both ranked - at three and four respectively.

London was the second most popular overseas destination for U.S. travelers, demonstrating the enduring appeal of the UK capital – as well as the impact of relatively weak Sterling, which made it even more attractive to U.S. visitors in 2009.

Paris was the fifth most popular destination – and second most popular outside North America for U.S. travelers – again, a demonstration of the enduring appeal of the major European tourism centers for U.S. travelers.

London and the major Canadian destinations were followed by other major European historical, cultural and leisure cities of Paris, Rome, Barcelona and Venice.

Hong Kong was U.S. travelers’ top city in Asia – the only major destination in Asia to make it into the top ten.

Figure 18 Top international destinations for U.S. travelersRank City Country

1 Toronto Canada 2 London United Kingdom3 Vancouver Canada4 Niagara Falls Canada5 Paris France6 Montreal Canada7 Rome Italy8 Barcelona Spain9 Hong Kong China 10 Venice Italy11 Madrid Spain12 Dublin Ireland13 Victoria Canada 14 Amsterdam Netherlands15 Calgary Canada16 Edmonton Canada17 Tokyo Japan 18 Ottawa Canada19 Florence Italy20 Munich Germany

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Top U.S. destinations for travelers from overseas

The major east and west coast destinations proved to be favorite locations among travelers to the U.S. from overseas, with New York topping the list of most-visited cities.

With hotels offering cut-price deals for travelers, Las Vegas was the second most-popular U.S. destination amongst travelers to the country. Miami took the third place in the table, while San Francisco and Los Angeles came fourth and fifth respectively.

Figure 19 Top U.S. destinations for international travelers

Rank City

1 New York2 Las Vegas3 Miami 4 San Francisco5 Los Angeles6 Orlando7 Chicago8 San Diego9 Boston 10 Seattle11 Honolulu 12 Washington13 Fort Lauderdale14 Newark15 San Antonio 16 Atlanta 17 Anaheim 18 New Orleans19 Houston20 Key West

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About hotels.com

hotels.com® is a leading provider of lodging services worldwide. The company offers an extensive portfolio of nearly 85,000 properties, ranging from full service hotels and all-inclusive resorts to vacation rentals and bed and breakfasts. To help guests make the right property selection for each trip, hotels.com provides a variety of tools and features on its site, including property descriptions, ratings, guest reviews, rate calendars, sorting options, maps, photos and virtual tours.

The Guest Advocate

hotels.com wants all guests to have a positive lodging experience, and serves as their advocate before, during and after the stay. Five compelling points encourage guests to book with hotels.com every time they travel, regardless of the purpose of their trip:

1) welcomerewards – The hotels.com loyalty program is simple to understand and use. There are no points to collect, no complicated restrictions, no blackout dates, and stays at every property count the same – whether it’s a two-star motel in Memphis or a four-star bed & breakfast in Boston. When guests book and stay 10 nights with hotels.com, they’ll automatically earn a free night.

2) No charges to book by phone – There is never an extra fee to book by phone. hotels.com specialists are available around the clock to assist travelers before, during and after their trips.

3) Price match guarantee – Prepaid bookings are guaranteed to be at the lowest available rate. If a guest finds a lower rate for the same property and travel dates, hotels.com will match it.

4) No change/cancel fees – Guests may revise or cancel their reservations without any penalty from hotels.com.

5) Qualified guest reviews – Only guests who have booked with hotels.com and completed their stay may post reviews to the site. People viewing guest content on hotels.com therefore know they are reading relevant, qualified feedback. The site now features more than one million guest reviews.

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34 The Hotel Price Index Review of hotel prices in 2009

Company History

hotels.com was founded in 1991 as Hotel Reservations Network, which offered a telephone booking service for discounted hotel rooms in major cities. In 1996, the company began offering service via the Internet, and in 2002, the hotels.com website was launched. hotels.com is an operating company of Expedia, Inc. (Nasdaq: EXPE)

U.S. Headquarters

10440 North Central Expressway, Dallas, TX 75231 phone: 469-335-1000 or 800-2-HOTELS

The company currently operates 52 sites around the world including 31 sites in 24 languages across EMEA.

The European sites launched in the UK in 2001 and now attract several million unique users every month. Thousands of people book bed nights through hotels.com every day.

For further information or interviews:

please contact Helen Ames at [email protected]

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hotels.com, welcomerewards and the hotels.com logo are either registered trademarks or trademarks of hotels.com, LP, a subsidiary of hotels.com. Other logos or products and company names mentioned herein may be the property of their respective owners. © 2010 hotels.com, LP. All rights reserved. CST # 2083949-50

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