Trends

Business and Leisure Average Daily Room Rates Increase for All Major Regions of the World

Future bookings for both sectors show average double-digit increases through Q1 2011

Pegasus Solutions Both business and leisure travel hotel average daily room rates (ADR) have increased over 2009 for all major regions of the world, according to the August The Pegasus View from Pegasus Solutions. The monthly report, drawn from billions of Pegasus transactions processed in August for approximately 90,000 hotel customers, also showed future bookings for both sectors returning average double-digit increases through Q1 2011.

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In the midst of corporate rate-negotiating season, The Pegasus View also is reporting August business bookings, those made through the global distribution systems (GDS), 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 also accompanied by slight increases in GDS average length of stay (LOS) and booking lead times, a key indicator of market confidence.

“Business travel is returning amidst the ongoing debate about whether the global economic recovery is losing steam,” said Mike Kistner, chief executive officer of Pegasus Solutions. “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 (ADS), is also realizing revenue boosts through increases in ADR. While booking volumes hover around +10% over prior year, a lift of +3% in ADR in August drove revenue to +13.7% over 2009, evidencing a more favorable balance between supply and demand.

As demand growth continues and hoteliers feel comfortable raising rates, The Pegasus View also shows double-digit growth in bookings for both channels through Q1 2011. Through the GDS, bookings currently show increases of more than +20% for nearly every month along with strengthening ADR, while ADS booking volumes are expected to grow at an average pace of +10% for the same period.

The August 2010 The Pegasus View is available in its entirety online and by free subscription at www.pegs.com. Data reported in The Pegasus View comes from Pegasus Solutions, the world’s single largest global processor of hotel transactions through the four GDS (Amadeus, Galileo, Sabre, and Worldspan) 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. 



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