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Ireland has come in as the least expensive destination in western Europe as hotel room rates fall 4pc within the year.

The current average rate of a hotel room in Ireland fell to €79 year-on-year and is now back to 2004 levels, according to the latest Hotels.com Hotel Price Index.

Globally, however, hotel prices increased by 2pc in 2010.

Dublin is one of the best value major cities in the world with the average room rate now just €73, while Kilkenny is the most expensive destination in Ireland with rates listed at €112 on average.

The capital experienced a higher drop in prices than any other Western European city, falling by 6pc year-on-year. Ireland is now the least expensive destination in western Europe and the fourth most inexpensive in Europe.

The rate at which Irish prices are falling is beginning to stabilise compared to 2009, which saw room rates drop 21pc year-on-year.