The 12% fall in room rates* was driven by price drops across every continent.
Prices in North America fell by the greatest extent, down 12% in Q4 2008 compared to the year before. Prices for hotel rooms in Europe fared little better, dropping 10% during the same period. In the Caribbean and Latin America they fell by 7%, while in Asia, hotel prices held up slightly better falling just 2%.
The fall in hotel prices in the Asian region was the first time hotel prices had fallen there since the Hotels.com Hotel Price Index began in January 2004.
Some of the notable findings about U.S. destinations included in this year's report:
* New York was the most expensive U.S. destination of those tracked in the global list, with prices averaging $255 during Q4 2008 - a fall of more than one-fifth (22 percent) compared to the same period in 2007.
* Washington, D.C. saw the sharpest price increase of any U.S. destination, with a 10 percent rise to $120 compared to Q4 2007. Demand for properties in the nation's capital surged as travelers planned trips for the presidential inauguration.
* Among the United States, New York was the most expensive destination, followed by Hawaii and Massachusetts. The least expensive states for travelers in Q4 2008 were Idaho, Nevada and South Dakota.
* New York topped American travelers' lists as the most popular domestic city destination, followed by Las Vegas, Orlando, Chicago, Los Angeles and San Francisco.
* For Americans venturing outside the country, Toronto was the most popular destination for U.S. travelers, followed by London. Paris, Rome and Hong Kong also made the top 10 list of international favorites for American travelers.
* For international travelers visiting the United States, New York, Las Vegas and Miami were the top destinations in Q4 2008.
The Hotels.com HPI tracks the real prices paid per hotel room rather than advertised rates. It is based on prices actually paid by customers for 68,000 hotels across 12,500 locations around the world.
The latest HPI looks at hotel prices for the period October to December 2008, compared to the same period the year before.
David Roche, President, Hotels.com Worldwide, comments: "Room rates dropped significantly in the final three months of last year as hoteliers around the world cut prices to try to fill their rooms. While last autumn, North America was the only continent to see the average room price fall, the latest Hotel Price Index shows the economic downturn is now affecting hotel prices on all continents. Price falls were most dramatic in North America (12%), but Europe, the Caribbean and Latin America were not far behind. The good news is that there is some great value to be had for travellers. This year really will be the year of the deal."
* 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.
