North American corporate rate shines in April

ADR continued a northward trend in April, realizing record or near-record growth margins over rates paid in 2011, according to data released Thursday by Pegasus Solutions.

North American corporate hotel rates set a new year-over-year growth record, increasing 9.3% over 2011, beating a previous record of 7.1% set in February.

Global rates for hotels booked through global distribution systems, representing mostly business travel transactions, grew 5.5%, the greatest growth margin since July 2011. Leisure rates also soared as global bookings made through online channels increased 9.1% over April 2011, and North American rates rose 7.3%.

“April’s numbers show that corporate rates paid in April 2012 were higher than four of the five previous years, and just shy of three percentage points of those paid in 2008,” said Mike Kistner, chief executive officer of Pegasus Solutions. “Hotels are staying true to their product, not only maintaining rates, but also driving them back to where they need to be. Combined with bookings growth, this rate growth has corporate revenue up by double digits over all five previous years.”

Following a 7.5% drop in March, global corporate bookings rebounded to just 0.5% below April 2011. If not for February’s extra day, April would have represented the global corporate sector’s best booking performance against prior year for 2012 thus far. North America’s business bookings made similar progress, coming within 5.8% of prior year in April after falling 9% from last year in March. Leisure reservations also improved from March losses. The global gap against prior year was narrowed from 7.9% in March to 6.4% in April; likewise, North America moved from a 9% slide in March to a 7.9% shortfall in April.

Looking forward, summer corporate bookings will proceed unevenly, with the potential for greater growth in June and August, while rates will continue with steady increases. Leisure bookings will hover near summer 2011 levels, with ADR expected to drive revenue growth.