Year-over-year growth is OK, but what hotels really want is to return the the glory days before the world economy began its meltdown in 2008. Both business and leisure numbers are closer to pre-crash levels than they've ever been.
Average hotel daily rates paid for corporate travel in August were within 1% of those paid pre-recession in August 2007 and 2008 globally, according to data released today by Pegasus Solutions.
The corporate market continued to rebound last month, narrowing a drop of -10% from last year for bookings in June to just -0.7%. Rates were down just -0.6% from August 2008, and up +0.3% compared to August 2007. For the leisure market, rates sustained an ascent over 2011, but still remained off 2007 and 2008 levels by approximately 15%.
Bookings for leisure travel, however, have increased more than 30% against both pre-recession years, according to David Millili, chief executive officer of Pegasus Solutions. “The hoteliers I talk to are happy to see demand and rates generally making progress over last year, but they’re also hoping for a return to the levels we experienced five and six years ago,” said Millili. “The leisure market has seen demand gain ground as rates slowly creep back, and the corporate market coming the farthest from 2007 and 2008.
Rates narrowed to within 1% of both years in August, as bookings against them grew by more than +20%.” The leisure market ended the summer with global bookings up approximately +9% over 2011. Rates for the channel were up +1.1% in August over prior year, growing slightly slower over the summer than the +3.4% year-to-date growth pace.
Looking forward, reservations are expected to level off before picking up momentum heading into the holiday season as rates remain steady. Conversely, corporate booking growth will likely ease over this period as rates stay firm through December.
Data reported by Pegasus Solutions comes from billions of transactions processed monthly for nearly 100,000 hotels, facilitating more than $16 billion a year. The Pegasus View, now produced quarterly, is the only industry report to reflect data drawn from both GDS and ADS transactions, representing the business and leisure markets respectively. The next edition reporting on the hotel industry’s performance for the third quarter will be released in October.
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