REPORT FROM THE U.S.—Although the year is winding down, hoteliers should be gearing up for a strong week of travel to close out 2011.
According to a survey conducted by AAA and forward-looking booking data from Dallas-based Pegasus Solutions, U.S. holiday travel between 23 December and 2 January will be up slightly over last year and nearly reach highs from 2006.
A survey conducted by AAA predicts that just fewer than 92 million Americans are expected to drive or fly 50 miles or more between that timeframe, a 1.4% increase over last year.
Pegasus, which uses electronic bookings from leisure-based alternative distribution systems to garner forward-looking data, confirmed an increase in hotel bookings as compared to the 2010 holiday season.
“Given that Christmas and New Year’s both fall on a Sunday, the presumption that the prime time for holiday travel, and thus the greatest number of stays, would occur over the last week in December between the two holidays,” said Julie Parodi, senior director of strategic planning and analysis for Pegasus. “That presumption is supported by Pegasus View forward-looking data.”
Parodi compared leisure bookings for North America made through the ADS channel as of 13 December, for stays occurring each day during the full months of December and January, to the respective days of week and dates of last year. The data showed more consistently elevated reservations over last year from Friday, 23 December through Monday, 2 January.
“These reservations are especially elevated for Saturday, 31 December, and Sunday, 1 January, with New Year’s Eve reaching the highest peak,” Parodi said.
She said cherishing time with family and loved ones during the holiday season is embedded in Americans’ culture. Today, traveling for the holidays is not only for the wealthy but travel providers have adapted their offerings to fit within various budgets.
“There are so many diverse ways that you can travel,” she said.
Parodi said average daily rate also showed consistent increases over prior year during this time period, with the most prevalent increases also occurring over the New Year’s weekend.
Globally, forward-looking data did not reveal as pronounced a pattern as that for North America. “But a rise in reservations and rates over the New Year’s weekend was evidenced (worldwide) also,” Parodi said.
According to the AAA study, about 91% of Americans will drive to their destination over the holidays—a 2.1% year-on-year increase—despite a gallon of gasoline costing approximately 29 cents more than a year ago. The survey showed about 5.4 million people—down 9.7% over last year—would fly over the holiday season.
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Beyond the holidays
Leading up to the holiday season, Pegasus reported both leisure reservations and rates picked up in November, rebounding from a slow growth month in October.
In November, global bookings grew by 6% year over year, which was up from October’s 4.8% year-over-year increase and near the year-to-date increase of 6.5%. Global ADR increased almost 4% in November, beating October’s increase of 2.7%.
Leisure performance was even higher in North America, with bookings up 7.1% over prior year and ADR up 4.8%.
“What’s the driver of this? Varying degrees of increased consumer confidence,” Parodi said. “A definite key driver of holiday travel is pent up demand and resourcefulness.”
Simultaneously, Parodi said the hotel industry is responding to increased demand with a greater awareness of the pivotal role pricing plays. Rate strategies are crucial to maximizing revenue at the property, she said.
Looking at forward-looking data for bookings made as of November for arrival in December through March, Parodi said performance is expected to remain strong.
“Rates show year-over-year growth in January with a potential slowing in February and March,” she said. “There is a potential for softening of rates as we come off the holiday months. It wouldn’t be all that uncommon.”
Business travel, data shows, will carry on strongly in 2012. Bookings continue to outpace the prior year through February and actually gain momentum through the end of the first quarter 2012.
“There is a potential uptick leading into spring convention season,” Parodi said. “Hotel rates look to continue growing and continuing to progress toward pre-recession levels. This coincides with the industry expectation for increased meetings in 2012.”
