Future hotel bookings show double-digit increases into 2011

WORLDWIDE Average hotel ADR for both business and leisure travel has increased for all regions of the world, according to August year-over-year data from Pegasus Solutions.

Data drawn from billions of Pegasus transactions processed in August for approximately 90,000 hotel customers shows future bookings for both sectors returning average double-digit increases through the first quarter of 2011.

In the midst of corporate rate-negotiating season, Pegasus reports that August business bookings—those made through the global distribution systems—had the highest increases globally over 2009 for all three key reservations metrics. The channel’s reservation volumes jumped 27.9%, while ADR increased 7.4%, helping drive revenue up 42.9% over 2009. These figures were accompanied by slight increases in average length of stay and booking lead times, key indicators of market confidence.

“Business travel is returning amidst the ongoing debate about whether the global economic recovery is losing steam,” says Pegasus CEO Mike Kistner. “What we’re seeing is a rise in corporate travel demand being driven by corporations’ urgency to pursue sales and new business opportunities now more than ever. Of course, this is still coupled with the cost accountability we’ve been seeing for a year now, as evidenced by the measured growth in room rates, length of stays and lead times. However, the result is still record increases in revenue, which is good for hotels visible to the increasingly consolidated corporate market.”

The leisure market, dominated by bookings made through alternative distribution systems, is also realizing revenue boosts through increases in ADR. While booking volumes hover at 10% higher than the prior year, a lift of 3% in ADR in August drove revenue up 13.7% over 2009, evidencing a more favorable balance between supply and demand.

As demand growth continues and hoteliers feel comfortable raising rates, Pegasus data shows double-digit growth in bookings for both channels through the first quarter. Through the GDS, bookings currently show increases of more than 20% for nearly every month, along with strengthening ADR, while alternative distribution system booking volumes are expected to grow at an average pace of 10% for the same period.

The August 2010 Pegasus View is available in its entirety online and by free subscription at Data reported in The Pegasus View comes from Pegasus Solutions, the world’s single largest global processor of hotel transactions through GDS and ADS channels. It is the only industry report to reflect data drawn from both GDS and ADS transactions, representing the business and leisure market respectively.