REPORT FROM THE U.S.—Future booking data for the next four months should have hoteliers breathing a sigh of relief as both corporate and leisure travel is expected to rebound from a stock-market-driven slowdown, according to data from Pegasus Solutions.
Julie Parodi, senior director of strategic planning for Pegasus and editor of The Pegasus View, said advanced corporate bookings in August grew by 10.2% over the prior year, a step up from July’s 5.8% year-over-year growth. In North America, corporate bookings grew year-over-year by 6.7%, compared to 2.7% in July.
Globally, average daily rate has been growing much more steadily, Parodi said, with rates for advanced bookings up 4.7% in August year-over-year, and 5.7% in North America.
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“While the markets were swinging in a seesaw, we saw both corporate and leisure bookings pick up in August,” she said. “Strong rate growth is definitely nice to see. It’s a reflection that there is still a lot of demand out there and that hoteliers aren’t getting nervous like the stock markets.”
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Julie Parodi
Senior director of strategic planning for Pegasus
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Parodi said the corporate market is much less reactionary than the leisure markets and just because the stock markets are hypersensitive doesn’t mean corporations are driving less to their bottom line. Corporations are still experiencing stronger earnings cash flow than last year, she said.
With access to more than 63,000 travel agencies and processing nearly 5 billon transactions a month, Pegasus uses electronic booking data to highlight trends emerging in the hospitality industry. Pegasus can provide data on forward-looking bookings approximately four months into the future.
Other trends shown in the electronic-booking data from Pegasus:
1. Although corporations are still permitting employees to take trips, they’re being more stringent on spending, Parodi said. Length-of-stay is being restrained as businesses are “more watchful of spending and cost per trip,” she said.
“We had first seen that in leisure sector and now we’re seeing that in the corporate sector,” Parodi said. “Businesses are saying that, while (face-to-face) meetings are a great way to drive profit, they’ve got to set boundaries.”
2. Although future booking data isn’t showing drastic changes to booking windows, Parodi said Pegasus is hearing rumblings that the airline industry is trying to make it less advantageous to book last minute, and that the hotel industry should follow suit. Parodi said it would be in hoteliers’ best interests to offer guests incentives to plan in advance.
“Travel providers should make promotions that are value-driven and enticing early on and not make those last-minute dives,” she said. “Using standard promotions, you can build up occupancy earlier; that’s actually a more profitably strategy.”
3. As advanced leisure bookings gained momentum from July to August, Parodi noted more travelers are willing to take trips in spring and fall, known as “shoulder seasons.”
“For many local areas, the fall can be an attractive time. In New England to watch the leaves fall, things like that,” she said. “Leisure travelers are looking for value now so sometimes they’ll look in the shoulder seasons. For shorter getaways, shoulder season can be more inviting.”
