Baku hotels affected by crisis

Baku hotels affected by crisis

A sudden drop in business and tourist trips caused by economic crisis started affecting a hotel business as well. For example profitability of European hotels with 5,9 % growth in 2007 dropped to 4,2 %. Last January number of customers stayed in the hotels was 30% than a year before.Despite experts’ opinion not to rush to decrease hotel rates we can witness today a drop of 20-40% for hotel rates in Dubai, 15-20% in Moscow, 27% in London, 14% in Berlin and Paris, 16% in Rome and 18% in Madrid. Apart from lower room rates hotels are offering multiple bonuses such as free food, car rental, etc.

Though Azerbaijan hotels are being affected too by the crisis they do not seem tending to offer lower room rates than before. For example, despite a significant drop in customers a 4 star «Park İNN» hotel in Baku that accommodates around 20,000 customers annually kept the rates unchanged. However, if the situation remains unchanged hotel management does not rule out update in pricing policy.

In 5* «Hyatt Regency» hotel they say they have not felt any difference since the start of the crisis. Nevertheless they confirmed that if the number of customers will drop significantly they will have to correct the prices to adapt to new economic climate.

Commenting on dropping room rates in Baku hotels the Minister of Culture and Tourism of Azerbaijan Abulfaz Garayev stated that this is a positive factor for the development of Azerbaijan tourism potential in general. ‘The market is regulating this process. Lower hotel rates will lead to competition between hotels for the customers. And this is very good’.

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