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Hotel average daily rates (ADR) in both corporate and leisure travel are, for the first time since the downturn, remaining steady or growing according to July’s The Pegasus View from Pegasus Solutions. The report, drawn from billions of transactions for nearly 100,000 Pegasus customers worldwide, indicates hoteliers, even in leisure markets, are no longer feeling they have to trade deep ADR discounts for reasonable occupancy.
Global distribution system (GDS) bookings worldwide realized a year-on-year increase of +6.3% in ADR, while this same figure for GDS bookings outside North America actually edged out May for the highest ADR growth year-to-date at +7.5% over 2009. Similarly, as the pace of booking volumes eased from May levels for the alternative distribution systems (ADS), ADR for the channel compared to the prior year did not budge.
“The combined global revenue for the GDS and ADS in June was up nearly 30 percent over the prior year,” said Mike Kistner, chief executive officer of Pegasus Solutions. “It’s clear to us that demand is increasing and room supply growth is slowing – the formula for higher occupancy, ADR and revenue. This month, however, we’re most pleased to see evidence that hotels are harnessing the value of strategic pricing. The end of the rate nosedive, especially in the leisure sector, and as evidenced by Marriott’s recent announcement to boost corporate rates, shows hoteliers are capitalizing on their worth, which will be imperative to a full recovery.”
June GDS bookings were +23.5% higher than the prior year, making it the third consecutive month this year to experience double-digit growth through the channel. These gains in bookings also eclipsed comparative figures for 2008 and 2007 by more than +43%. Another encouraging GDS trend was a growing length of stay, indicating an easing of corporate travel budgets.
Other positive data included a slight length of stay increase for the global ADS. The channel is still exhibiting signs of bargain-shopping with the average look-to-book ratio climbing approximately +50% over 2009 for the second month in a row. However, ADR did not retreat on a global level, and for markets outside North America actually increased slightly, helping support a revenue increase of +20.8% from a bookings increase of +20.1%.
July’s The Pegasus View, which is the only industry report that reports on both GDS and ADS transactions, also contains a breakdown of bookings, ADR and revenue for additional regions not previously reported on, including South America, Europe, and Africa/Asia/Oceania.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
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