Dramatic increase in GDS hotel bookings
GDS forward-looking booking volumes for hotels have increased dramatically over the past month, a report from Pegasus has revealed.
The March edition of The Pegasus View revealed positive booking volume growth for five of the next six months and each of the next four consecutive months.
In addition, Average Daily Rate (ADR) is also showing “impressive gains over the prior year”, said the report.
“Lead times appear to be lengthening, suggesting a slow return back to the norm and indicative of a general increase in confidence and industry recovery.”
A combination of strong forward bookings and rising occupancy rates indicate that the hotel sector, particularly with regards to the business travel segment, has “turned a corner”, said Pegasus.
GDS and ADS bookings for Q1 2010 outpaced comparable periods for 2007, 2008, and2009 and March bookings for GDS and ADS combined exceeded March 2009 by +7.96%.
However, the report did warn that the struggle for good ADRs remained and in some regions, was still lagging.
“We’re seeing good recovery in the number of rooms being sold and average occupancy, and now an average daily rate that is starting to creep up. Do we expect it to return to 2008 levels? Not this year,” said Timothy O’Neil Dunne, Managing Partner at T2Impact Ltd.
“As long as people are still somewhat concerned about paying their mortgages, or hesitant to ask for increases in their business travel budgets, they won’t be upgrading rooms or purchasing the extra services and concierge items that drove the level of revenues we saw in 2008.”
Looking at the numbers, ADR for March 2010 compared to March 2008 & 2007 is down by -12.16% and -7.3% respectively.
Those hotels that plan ahead for the upswing in business should expect to begin increasing room rates to close the ADR gap.
Marriott International reported in April that it was witnessing “a strong uptick in business travel, boosting occupancy in the first-quarter this year and soon expected to be positioned to begin increasing room rates.” See the Pegasus View for more detail (www.pegs.com).