The hotel industry continued to recover in January with strong growth in both global hotel revenue and bookings, according to data released today by Pegasus Solutions in The Pegasus View. Driven by demand and assisted by rate growth, business travel revenue rose by more than +40% over January of last year, while leisure revenue jumped nearly +15% over the same period in 2010.
The report also forecasted growth in business and leisure bookings through mid-year based on business on the books. Forward-looking data for bookings made through the mostly corporate global distribution systems (GDS), show an average monthly growth rate potential of more than +20% through the second quarter. Average daily rate (ADR) for the channel will continue at the same or an even stronger pace than that realized in Q4 2010, while length of stay (LOS) will also expand.
"The travel industry's rebound is a direct result of a healing economy and increased corporate travel," said Mike Kistner, chief executive officer of Pegasus Solutions. "As corporate profits and competition return, companies are sending executives and sales teams back on the road. The accompanying growth in length of stay and booking lead times suggest more of these trips are made of group travel, conferences and meetings, which are a boon for hotels."
The outlook for the leisure market also reflects positively for hotels. Bookings to-date made via online channels, or the alternative distribution systems (ADS), show increases of more than +10% over 2010 through spring and into summer. ADR in this channel will continue a slow and steady climb as well, while LOS will remain static. Look-to-book ratios, a product of online consumer comparisons and transaction processing inefficiency, continue to grow by over +40%, and will remain an issue for the industry.
"Consumers will travel as much or more in the coming year. A strong, but slightly smaller majority will also spend as much or more on travel in 2011 than in 2010 - they plan to spend, but spend wisely by shortening trips or aggressively shopping rates," added Kistner. "Hotels would do well to examine their revenue management strategies to make sure they don't risk losing the business or revenue to be had with inapt rates that are too high to sell rooms, or too low to make a profit."
The January 2011 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 billions of transactions processed monthly by Pegasus Solutions, the world's single largest global processor of hotel transactions. It is the only industry report to reflect data drawn from both GDS and ADS transactions, representing the business and leisure markets respectively for approximately 90,000 hotels worldwide.
Pegasus Solutions is the world's leading provider of technology and services to hotels and travel distributors, supplying the award-winning RezView® NG central reservation system, electronic distribution services, advanced agency commission processing and payment services, and hotel marketing representation services. Founded in 1989, Pegasus created and launched the hotel switch, and today its customers include approximately 90,000 properties around the globe as well as a majority of the world's travel agencies. Additionally, Pegasus' powerful representation arm incorporates Utell® Hotels & Resorts and Utell Connect, services that have been chosen by more than 6,000 member hotels in more than 130 countries. Pegasus is the hotel industry's largest most experienced third-party marketing, sales and reservations specialist. Pegasus also powers the niche consumer Web site www.hotelbook.comTM, dedicated to promoting independent and boutique hotels throughout the world. Headquartered in Dallas, Pegasus has 21 offices in 12 countries, including regional hubs in London, Singapore and Scottsdale, Arizona. For more information, please visit www.pegs.com or www.utell.com.