June 25, 2013

GDS corporate hotel bookings for May rose +2.4%, rates dipped slightly


May 2013 global hotel bookings through global distribution system channels increased by 2.4 percent year over year, according to Pegasus Solutions. The average daily rate on those bookings nearly was flat, declining 0.2 percent compared with May 2012.

Global leisure hotel bookings in May grew +3.7% over prior year, according to Pegasus Solutions, the single largest processor of electronic hotel transactions. Setting the stage for a solid summer travel season, the gains are expected to not only continue, but to also climb along with rates through August.

The increased demand was accompanied by growing pricing power for hotels as rates grew +2.6% for the month. For bookings, May performed better than each of the last six years, while rates were higher than every year back to 2009, not quite reaching 2008 and 2007 levels. However, with business on the books through May suggesting continued booking and rate gains, the outlook is still positive for hotels.

“Each June, hoteliers hold their breath in anticipation of what the potentially profitable summer travel season will bring,” said David Millili, chief executive officer of Pegasus Solutions. “For the last few years, we’ve seen consumers refuse to sacrifice vacations entirely as they’ve made adjustments to length of stay and hunted for lower rates to accommodate tighter budgets. This summer, we’re seeing the same commitment to holidays coupled with more willingness to book at higher rates than last year.”

Global corporate bookings rose +2.4% in May over 2012 as rates dipped slightly to -0.2% under last year’s levels. A retrospective of the month’s performance against every year since 2007 placed bookings shy of only 2011 by a slight -1.5%, and rates short of only 2008 by an even slighter -0.6%. Looking forward, global corporate bookings should realize continued growth in June, but ease back around prior year levels through the end of summer. Rates will see modest increases through August, with the potential for new momentum as the business travel season resumes in September.

Data reported by Pegasus Solutions comes from billions of transactions processed monthly for nearly 100,000 hotel clients, facilitating more than $16 billion a year. The Pegasus View, produced quarterly, is the only industry report to reflect data drawn from both GDS and ADS transactions, representing the business and leisure markets respectively. Pegasus’ PegasusView Market Performance business intelligence is a monthly reporting product augmenting the global data provided quarterly in The Pegasus View.