Cheapest in the country

The Reserve Bank might be trying to put the brakes on the economy by lifting the rates by .25% this month with the specter of rising inflation, but it's cold comfort for Gold Coast hotels which yesterday were labeled among the cheapest in the country.

Flagging demand for accommodation on the tourism strip has seen average room rates slump 14.8 per cent in the past year.

According to Hotels.com hotel price index, the Coast is the second cheapest hotel market in Australia, only just ahead of Cairns which has been ravaged by a sharp downturn in the inbound tourism market.

The average room rate on the Coast in 2009 was $135 a night, down from $157 in 2008. Cairns room rates were bumping along the bottom at $117 a night, down from $127 a year earlier.

The news may be good for travelers but it is a major sign of stress in Queensland's two key tourism markets which have so far failed to benefit from the rebirth of Australia's resources boom in the past 12 months.

The boom is being touted as one of the key reasons for the Reserve Bank yesterday lifting the official cash rate by 0.25 percentage points to 4 per cent.

The strong Australian dollar has made hotel stays in Europe 13 per cent cheaper, on average, than in 2008 and 14 per cent cheaper the US.

The Asia Pacific region was 16 per cent cheaper, while Latin America was 21 per cent down on a year earlier.

Gold Coast hotel industry consultant Mike Jones said despite the downturn, he was hopeful of an upturn for the tourism strip towards the end of this year.

He said the slide in Coast room rates was largely driven by a slump in corporate travelers who traditionally paid more per room night than the leisure traveler.

"There is certainly a degree of optimism for the second half of the year," he said.

"But it's going to be very dependent on the economy in general."

Mr Jones said the slide in corporate visitors would see competition among Coast hotels for conferences also heat up this year.

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