Big City and Small City Budget Lodging Differences

I just did a post at a hotel blog on the differences in hotel prices between big cities and smaller cities in the United States. It’s easy to compare apples to apples in this country because the market is so dominated by chain hotels that don’t vary much. Sure, there are differences around the margins, but it’s hard to tell when you wake up in a Hilton or Courtyard by Marriott whether you’re in Albany or Anaheim.

The differences can be pretty shocking. A Courtyard by Marriott standard room in Tampa is $109. In New York City it’s $409 for the same kind of room on the same weekend. A Hampton Inn room that’s $148 in Omaha is $405 in San Francisco. (Who’s paying that?! They need to learn how to use Hotwire.)

But what about the rest of the world at the budget end of the scale? How much difference does it make when staying in a big city compared to a much smaller one? Even in some developing countries, there’s a big underlying cost difference because of real estate prices, taxes, and labor costs. So how do hostel prices stack up? I looked up the same random weekend in May on Hostelworld and Hostelbookers. Here’s what I found. All prices are per person, per night. So double the price here for a private room for two.

$16 double room in India

$8.50 dorm, $28 double room in TurkeyIndia – Mumbai
Shared dorm – $14 to $22
Private room – $15 to $40+

India – Jaisalmer
Shared dorm – $1 to $10
Private room – $3.60 to twelve choices under $10

Turkey – Istanbul
Shared dorm – $11 to $33
Private room – $16 to $34

Turkey – Goreme
Shared dorm – $6 to $16
Private room – $11 to twelve choices under $20

Vietnam – Hanoi
Shared dorm – $5 to $12
Private room – $4 to $35 (most under $10)

Vietnam – Sapa
Shared dorm – $4 to $9
Private Room – $4 to $10

How well does this correlation hold up when we look at five or six other places? Much better in expensive countries than in most cheap ones it turns out. Prices in Buenos Aires are as good or better than what you’ll pay in Salta or Mendoza. The same is true of Quito, Budapest, or Kuala Lumpur. The reason for this is that there’s much more of a tourism infrastructure in the capital and therefore much more competition. If you own the only hostel in some small town, you have a lot more pricing power. When you’re competing with 30 others, you are subject to market forces.

So in general, if you’re in an expensive country, you should limit your time in the main city to seeing what you want to see and getting business done. Then hop the train/bus out of London, Paris, or Sydney. In many of The World’s Cheapest Destinations, however, it doesn’t make all that much difference unless it’s an out-of-whack place like Mumbai. Stay in Bangkok for the food and nightlife if you want, soak up the scene in Sofia for a week if you feel like it. So this is another budget advantage to picking the right destinations: you don’t have to hightail it out of the big city because accommodation is too expensive. So you only leave fast when it’s a pit like Jakarta or Guatemala City and there’s no good reason to stick around anyway.

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  1. Jenny

    You’re right about India. A few months ago I paid $18 for a dorm bed in a depressing hostel in Bombay after I landed. I was thinking isn’t India supposed to be cheap? Then I started traveling around and was paying $1-$3 a night for a dorm bed or hammock in other places. I got a nice room with a bath for less than five sometimes. Competition matters a lot though. Places without many choices were always more.

  2. gendorf

    Great post and spot on about the prices. Looking to explore turkey this summer.

  3. fricho

    Compared to travel destinations from Europe this are really cheap!

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