GLOBAL REPORT—Booking windows continue to lengthen, shifting direction in 2011 and steadily increasing on both the business and leisure sides through the first quarter of 2012, according to data from Pegasus Solutions.
In North America, the average lead time for leisure travelers is approaching pre-recession levels; globally, leisure lead times are meeting and exceeding pre-recession levels.
Most notably, average reservation lead time for business travelers in North America—which almost always trails the rest of the world, sources said—has surpassed international numbers and pre-recession levels. The average lead time for North American business travelers in February 2012 was 22.99 days while lead time for the rest of world was 21.4 days. In February 2007 it was 19.38 days.
Lead time in February for business travelers was 11.8% longer in North America and 4.8% longer internationally, compared to February 2011 data. For leisure travelers, lead time in North America in February 2012 was 6.4% longer than in February 2011, while international leisure lead times were 8.3% longer.
Pegasus collects data from more than 63,000 travel agencies—online and off—and processes nearly 5 billon transactions a month. The company does not collect data on brand.com sites.
Hoteliers said they’ve noticed group travel lead times lengthen as demand increased during the past 18 months. To get the required availability, groups now need to book further in advance.
“In the first quarter of 2012, we are starting to see that a lot of these advanced purchases are starting to expand,” said Paul Wood, VP of revenue management for Greenwood Hospitality Group, which has ownership and/or operates eight hotels, both branded and independent. “People are seeing the need to plan earlier and are trying to look for better deals. Advanced purchases let travelers save a couple of dollars.”
Wood said longer lead times are a direct result of increased demand because, as rooms or meeting space fills up, travelers feel the need to reserve rooms and space earlier. Also, in high demand periods, effective revenue managers will shift inventory to channels with longer lead times and reduce inventory on opaque channels and flash sales, which is another driver of extended booking windows.
Increased lead time on the leisure side is a result of several factors, including growing consumer confidence and an economic recovery, said Julie Parodi, senior director of strategic planning for Pegasus and analysis editor of The Pegasus View.
“It’s an indicator that travelers are willing to commit time and money,” she said. “More people are getting back to work; therefore more people are spending money on travel.”
Parodi said longer lead times often occur as a result of travelers going farther distances and spending more money, both positive signs for the industry.