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Hotels realize steady global gains in both business and leisure in Q1.
Thursday, 1st May 2014
Source : Pegasus Solutions
 

The first quarter closed with hotels realizing steady gains in both business and leisure volumes and rates.

On a global level, each month saw increases over prior year in reservations booked through the global distribution systems (GDSs) and alternate distribution systems (ADSs), as well as in the rates paid for those rooms.

4Hoteliers Image LibraryCorporate volumes climbed from slight increases in January and February to a solid +4.1% over prior year in March, resulting in a +2.2% year-to-date growth pace.

Rates paid by business travelers were at least +2.5% ahead of 2013 each month, averaging to +2.8% year-to-date.

Leisure bookings peaked in February, but fell only slightly to +3.7% ahead of March 2013 by quarter’s end.

Rates for leisure reservations made consistent gains, reaching as high as +5.8% over 2013 by the end of March, setting a significant pace of +4.3% year-to-date.

These increases can be attributed to a combination of pent-up and ongoing demand, which is enabling hoteliers to increase rates, maximizing profit potential. Forward-looking data suggests strong travel performance – for both channels – for the remainder of spring and into summer.

KEY TAKEAWAYS

  • Each month of 2014 has seen the year-over-year global corporate booking volume increase over the previous month. This, accompanied by single-digit but steady rate growth, is fed by companies’ increased willingness to invest in profit-producing travel.
  • Leisure travel has already delivered an impressive performance this year globally, with volumes at least +3.1% over 2013 for January, February and March. As getaways gain budget priority, travelers are also willing to  pay higher rates, as evidenced in the first quarter’s data.
  • Global GDS forward-looking data indicates corporate bookings will approximate prior year levels into  summer, while rates will continue modest but consistent growth.
  • Global ADS forward-looking data shows a combination of solid reservation and rate growth, averaging +5%
    through July. These increases will set the stage for revenue growth that could reach near double-digit levels with the onset of summer travel and major events like World Cup in Brazil.
GDS CHANNEL (CORPORATE TRAVEL FOCUS)

First quarter 2014 global performance for the GDS channel reflects strong corporate travel demand that continues to expand. January kicked off the year with business bookings ahead of January 2013 by +1.0%, with February and March bookings growing by +1.5% and +4.1% respectively.

Some of the lift seen in March was due to the Easter holiday falling in April this year instead of March, which allowed additional business focus and travel.

Overall, business travel demand is experiencing a steady rise that is affecting both the number of trips taken over prior year and room rates.

Monthly rates increased at an average of +2.8% during the first quarter over prior year. January, February and March rates respectively rose by +2.9%, +2.5% and +2.9%. These increases drove revenue growth of +4.3%, +4.8% and +7.4% thanks to companies relying on the strength of in-person meetings.
4Hoteliers Image Library

More trips are being taken for both transient and group business travel, as well as for small and large meetings.

This mixed rise in trip types has resulted in shorter average reservation lead times than prior year. Trips were booked an average of 18.07 days in advance during first quarter 2014 versus 18.07 days during first quarter 2013. March trips were booked 17.65 days ahead in 2014 versus 18.65 in 2013.

Trip length still seems to be contained to help control costs and keep travel return on investment in check. During first quarter, trips lasted an average of 2.17 days, versus 2.16 days during first quarter 2013. March trips averaged the same 2.14 nights as last year.
4Hoteliers Image Library

Read the full report HERE

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