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Toronto's skyline. (Fred Lum/The Globe and Mail)
Toronto's skyline. (Fred Lum/The Globe and Mail)

Morning Business Briefing

Canadian hotels aren’t cheap, but they fare well in a global ranking Add to ...

These are stories Report on Business is following Friday, May 30, 2014.

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WiFi included?
Canadian hotels aren’t cheap – these days, nothing is – but their average rates are well down in a global ranking.

According to Bloomberg’s world hotel index, Toronto ranks No. 26, with the average hotel cost at $189 (U.S.) a night. Further down the list, tied for No. 38, are Montreal and Vancouver at $177, with Calgary at No. 49 at $162.

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The world’s most expensive hotels in the ranking of 106 cities are in Geneva ($308), Dubai ($273), Kuwait City ($253), Zurich ($250), and Miami ($245).

Rounding out the top 10 are Hong Kong ($242), Edinburgh ($241), London and Singapore ($235), and New York ($233). Paris just misses, at No. 11, at $232.

At the bottom are Warsaw ($84), Sofia ($83), Calcutta ($81), Chennai, India, and Makati City, Philippines ($78), and Hanoi ($62).

“Geneva is very expensive because of all the international organizations and the ancillary businesses in the city,” Jan Freitag of research company STR Inc. told Bloomberg.

 “These people don’t tend to pay for themselves and that means they can stay at very high- end properties.”

Economic growth slows
Canada’s economy limped through a brutal winter, with growth slowing to an annual pace of 1.2 per cent in the first three months of the year.

It was the slowest growth since the fourth quarter of 2012.

Today's measure by Statistics Canada of gross domestic product in the first quarter marked a decleration from the 2.7 per cent of the final three months of 2013.

That fourth-quarter reading was revised down from an earlier measure of 2.9 per cent.

While growth slowed, Canada’s economy still outpaced that of the United States, whose economy contracted to the tune of 1 per cent, annualized, in the first quarter.

The Statistics Canada measure came in below the expectations of economists, who had expected a reading of up to 1.8 per cent.

On a monthly basis, the economy inched ahead by 0.1 per cent in March to cap the quarter.

Underground
So why exactly has Britain’s statistics agency decided to include prostitution and the illegal drug trade in its new measure of gross domestic product?

As The Globe and Mail’s Jacqueline Nelson reports, the Office for National Statistics is doing just that, and, in an initial measure, found that those underground activities added more than $18-billion (U.S.) to the economy in 2009.

Here’s the take from BMO’s Ms. Lee:

“The U.K. is joining the likes of Italy, Finland, Norway and a few other European nations in including prostitution and the drug trade in its GDP calculation. Although there is some speculation that this is being done to boost the size of its economy and, thus, have a smaller debt-to-GDP ratio, there is another reason. The European Union must comply with new Eurostat guidelines, and estimates must be made for all transactions in which ‘all units involved enter the actions voluntarily.’ Of course, the voluntary part might be debatable. Besides, how accurate will these figures be? How exactly does one collect a data series on the sex trade? Will there be a deflator applied as well, so we can have a nominal and real series? In any event, it is estimated that these new sectors will add 0.7 per cent to GDP as of 2009.”

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