Continued: The global hotel industry is enjoying a growth & signs of a strong recovery, part 2.

Travel booking lead in times:

Graph shows the length of time prior to reservation date that a booking is made

BTI UK's research indicates that the majority of bookings (30%) are made between 4-7 days prior to arrival, with only 10% of bookings made on the day of arrival. This shift toward longer lead in times reflects a realisation that lower tactical rates are no longer available to the extent they were in 2003/04 and that those leaving bookings to the last minute run the risk of paying rates higher than those contracted.

Interestingly, more bookings are made on the day of arrival to Eastern Europe than are made domestically within the UK. The number of bookings made on the day of arrival within the Americas and MEWA regions is also high whilst the majority of visits to the ASPAC and African regions are made two weeks in advance, reflective of the length of time involved in reaching these destinations.

Global cancellation lead times:

Chart shows number of days prior to arrival that bookings are cancelled

From January to June 2005 10% of all bookings made through BTI UK were subsequently cancelled, this is in line with all travel management companies in the industry. Nearly half of these bookings were cancelled within 48 hours of arrival at destination, highlighting the pitfalls of booking restrictive promotional and Internet rates which often carry with them significant cancellation penalties. Bookings within the UK are cancelled nearer the date of arrival than elsewhere in the world, while the majority of cancelled bookings to North American destinations are cancelled more than seven days prior to arrival.

"It is encouraging that our research suggests that travellers are planning their itineraries further in advance as they become aware of the issues surrounding availability and cost," comments Margaret Bowler.

"However, it is noticeable that travellers are cancelling unwanted bookings nearer to the date of arrival which causes availability problems as rooms are only available at the last minute."

Hotel Star ratings:

Graph shows achieved average room rates by property star rating

Average room rates continue to increase across all star ratings, with the highest increase (8.8%) experienced in the budget sector and the lowest increase in the four star market. This reflects organisations' preference to downgrade their accommodation as the budget sector continues to expand and upgrade and is in line with their policy requirements.

Despite being in decline for the past 18 months, the five star market is now showing signs of recovery. This is forecast to continue as major developments are planned, particularly in the ASPAC and MEWA regions.

Summary:

Margaret Bowler concludes: "The results of the BTI UK survey show clear signs of growth and recovery in all world markets. Given this strong position we recommend that clients carefully assess their hotel programme and policy to ensure they are in the very best position when it comes to negotiating rates with suppliers for 2006.

"It is likely that major hotel groups will be assessing client accounts not merely by potential volume, but also according to the profile of the account in terms of value. The long held presumption that high volume equals low rate is no longer necessarily true in today's market and companies should look to their travel management company to provide guidance and quality data."

She continued: "With occupancy levels set to rise further, clients looking to achieve cost savings will need to ensure their travellers stick to their mandated policies to ensure they can demonstrate clear volumes to their preferred suppliers or look at downgrading to less expensive properties."

Contact
Laurie Salt,
Public Relations Manager
Phone: + 44 (0) 1256 312 623
Email: laurie.salt@bti.co.uk

http://www.bti.co.uk