REPORT FROM THE U.S.—With access to more than 63,000 travel agencies and processing nearly 5 billon transactions a month, Pegasus Solutions is in a unique position to use electronic booking data to highlight trends emerging in the hospitality industry.
“All of that data collectively has proved to be very directional,” said Julie Parodi, senior director of strategic planning and analysis for Pegasus and editor of The Pegasus View. “We are able to see how our industry is performing, where it’s going, where it has been and where it’s trending.”
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Julie Parodi,
senior director of
strategic planning and analysis,
Pegasus Solutions |
Parodi said a unique angle Pegasus can provide is data on forward-looking bookings approximately four months into the future. “It gives us a real good handle on how bookings are unfolding,” she said.
In an interview with HotelNewsNow.com, Parodi outlined several trends electronic bookings are showing this season:
1. Reservations, rates up
Both reservations volume and revenue rose up to near-record growth rates in March, increasing by 30% and 42.5% respectively over the prior year. Parodi said Pegasus has seen other little upturns, but March in particular experienced a significant boost.
On the business side (looking primarily at Global Distribution System data), booking volume and average daily rate began trending upward last November. Year-over-year business travel demand has been up approximately 20% each month, Parodi said. Rate growth isn’t as strong, up at an average of 6%.
2. Business travel slowed in April
April saw a slowdown in growth on the business side, with booking numbers almost identical to last year.
“It was probably the first time in a while where people saw a slowdown in growth. Everyone has been used to this channel recovering strong,” Parodi said.
A combination of a few things led to April’s slowdown in business demand: the Middle East crisis and its effect on fuel prices; the earthquake and resulting tsunami in Japan; and the fact Easter fell in April this year. But “even as we analyzed it then we thought it was temporary,” Parodi said. “We were almost back up to 20% in May.”
3. Leisure recovery slower but more steady
Leisure-booking numbers have been growing progressively, averaging about 10% year-over-year growth thus far in 2011. April saw an uptick in bookings, actually benefitting from the Easter holiday, and even ADR began its climb in April. “Rate has been ramping up, and in May it was up 4.8% globally,” Parodi said. “Leisure has been doing quite well leading into the summer months.”
4. Bullish on summer
The remainder of the summer is “looking very encouraging,” according to Pegasus. The average of 10% growth in leisure bookings should continue across all segments, Parodi said. “If anything, that has potential to increase a bit toward the end of summer.”
She said ADR looks to continue to increase as well by approximately 3% to 4%, even though length-of-stay looks to remain relatively short. “Vacations are no longer considered a nice-to-have; rather, they’re a need-to-have,” Parodi said. “For people whose budgets are tighter, they’ll cut down on food and entertainment costs. And they’ll reign in those lengths of stays.”
Parodi said the luxury segment is leading the recovery by bookings volume, but people on all levels are determined to take their trips to the extent they are able to. “On any level, whether you’re looking for luxury or economy, you’re still looking for the best value,” she said.
5. Lead times increasing
Pegasus also analyzes electronic booking lead times. Parodi said those metrics have slowly and steadily been increasing. “That’s a great sign—it conveys different things on both the business and leisure sides,” she said. Increased booking windows in combination with rising ADRs speak to an increase in meetings and conference business, she said. On the leisure side, increased lead times speaks to consumer confidence and “committing to making that expenditure ahead of time.”
“I’m optimistic because I’ve seen how resilient the industry can be,” Parodi said. “We’ll see soft patches, and by no means is travel immune to events. But it does have a strong immune system, if you will, and it does show its ability to rebound and come back.”
