How will Italian economy affect hotel rates?

My guess is that hotel rates will not be changing since they're all based on the common currency - the euro. What might change (and who knows how) would be the exchange rate.

Hotel rates would only change (fall) if demand drops off dramatically. That is unlikely to happen.

Bob, That's a really difficult question to even speculate on, as it's not clear at this point what's going to happen with the economic situation in Italy. There's no way they can be "bailed out" as Greece was, so I'm not sure how they plan on dealing with the situation? I suspect that the Hotels listed in Rick's books will honour the prices they have listed. I tend to take the attitude that if I want to travel to a particular city, I either have to pay whatever the Hotel charges or else look for a lower cost alternative (ie: Hostels). Happy travels!

Hotel rates in Italy will be the same next year. If you are booking for next summer email the hotel directly (English is fine) and suggest a little percentage discount for booking in advance. Remember Venere and all those booking sites take their percentage before passing your money on to the Hotel, so the Hotels do accept 20% or so less per room...just ask.

people get jumpy and don't travel more rooms become available room prices drop a little
YMMV

For the most parts, I think rates will be little affected. Certainly, to think that the advertised rates will drop...those that are listed on the website...is probably unrealistic, but if demand for whatever reason starts to drop, they will likely be reflected in "offers" or "specials". Another tact is if demand is soft, and you are looking to stay maybe a minimum of 3 nights, bypass the web reservation and email directly, asking about both availability and price. More than once I was offered a price at a discount or maybe a better room for the cheaper price. Since you are banking on soft demand, it may be less likely to happen if you book 6 months ahead, since they have time to be an optimist. As the date approaches and they have unfilled rooms, then deals start to occur.

The only thing that would dramatically affect the rates would be something cataclysmic like Italy leaving the euro and going back to their own currency. If that happened, you would think it would mean huge bargains for the US $ and the Pound, even the Euro. That is the core of this mess - countries like Italy, Greece, Spain etc. would be devaluing now if they still had their own currencies - but they can't. So the beatings will continue until moral improves! PS - I just have to add that it isn't so much the Italian economy (which has been historically weak for decades). The current account deficit in Italy is not large. It is the historical debt overhang that is the issue. When their bond rates get too expensive, it becomes impossible for them to service the debt. It isn't like they are running huge deficits or the country is in a total mess (I mean it is, but - it is Italy), it is much more a problem of their credit getting too expensive. The best analogy for an individual it to think about your own credit card debt - say you have 10k out there, and you spend $500 a month to keep it there, waiting to pay it off when you save a chunk or get a raise or something. But then the card company says, we need $1,000 a month on this not $500 - and you just don't have it. That is much more the situation that Italy is in.

Paul has a good suggestion of emailing the hotel directly for the best rates. It's also good to verify their cancellation policy. There are several considerations though... For our trip to Italy last April I was able to secure lower rates than on hotel websites by emailing them directly. When the rates/cancellation policy were the same as the hotel's website, I ended up booking on the website as they were easy to cancel and you usually receive an online notification. We made our reservations in January for the beginning of April. Starting in February, we saw the rates keep rising. For only one hotel did the rates actually go down before we left. For our Greece trip in September, we made reservations starting in February and March. We spent a few minutes checking the websites every few weeks or so and found some really good deals on a couple of our hotels and we rebooked. Even though the economy in Greece is in turmoil, you could not tell on any of the islands or tourist areas, including Athens. It was the same way in Italy last April...

If you book early, be sure you will be permitted to cancel without penalty. That way, if rates do drop, you can cancel your early booking and go with a cheaper one later. I traveled to Europe right after 9/11 when travel was badly impacted. Hotel rates were definitely down, so I contacted the hotels I had booked earlier letting them know that I was probably going to cancel unless they could drop their rates. And, in three of four cases, they did. The fourth one said no, so I did cancel that one and booked a cheaper place.

Rates are based on supply and demand. If less people travel and rooms will go vacant, you can bet rates will drop. I don't see more people traveling because of the economic times, so I don't think price increases are likely. That said, Italy always has some crowds - more in the summer. How do you work it to your advantage? Rooms that are booked six months out are not going to be cheaper. At this point, hotels are asking their standard rates (because they have lots of time before they need to discount them). If all their rooms are booked up ahead of your travel, they're happy and have no reason to lower the rates. IMO, the best way to save on hotel rooms is travel during, at least, shoulder season and book last minute (I prefer the morning before I arrive). Your first choice hotel may be booked up, but there will be rooms somewhere and they're likely to go cheap. I like maximum flexibility (and I'm not really picky about the hotel), others couldn't stand to travel without reservations. A lot depends on you.