Rates rise as hotels avoid past mistakes

Average daily rates (ADR) continued to show gains in April 2012, as hotels turned in record or near-record growth margins over rates paid in 2011 according to newly released data from Pegasus Solutions. The data shows that North American corporate hotel rates set a new year-over-year growth record, increasing 9.3% over 2011, and beating a previous record of 7.1% set in February by over two percentage points. Pegasus found that global rates for hotels booked through the global distribution systems (GDS), representing mostly business travel transactions, grew 5.5%, the largest growth margin since July 2011. Leisure rates also soared as global bookings made through online channels increased by 9.1% over April 2011, and North American rates rose 7.3%. Mike Kistner, chief executive officer of Pegasus Solutions, observed of the gains: “A common misstep many hotels made in 2001 and 2008 when bookings fell was to automatically abandon strategy and slash rates. April’s numbers show that corporate rates paid in April 2012 were higher than four of the five previous years, and just shy of three percentage points of those paid in 2008.” Kistner continued: “Hotels are staying true to their product, not only maintaining rates, but also driving them back to where they need to be. Combined with bookings growth, this rate growth has corporate revenue up by double digits over all five previous years.” For more, check out http://www.pegs.com .