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Rate conscious, savvy consumers will raise “look to book†levels
Monday, 29 Jan, 2010
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A rise in electronic travel booking volumes in December helped bring levels up to exceed the equivalent month in the previous two years, according to new data.
Travel technology company Pegasus Solutions reported that December GDS booking volumes, which predominantly represent business travel, increased by 15.35% over 2007 and +6.28% over 2008.
Alternative distribution system (ADS) booking volumes, which mainly represent leisure travel, jumped by 22.49% over 2007 and 17.18% over 2008.
The figures are based on the four billion transactions Pegasus processed during the month for more than 95,000 hotel distribution customers worldwide.
In light of this recovery in booking volumes, a Pegasus View booking report highlights the importance of raising rates lowered in 2009 to drive demand, drawing parallels to the post-2001 recovery.
CEO Mike Kistner said: “Following a year that started with booking volumes significantly down, the meteoric rise in the latter half of the year to levels in both channels that exceeded even 2007 serves as validation that the recovery evidenced in previous editions of The Pegasus View is in fact occurring.
“Many hoteliers find themselves again in the position of developing the most effective strategies to increase rates to a normalised level, which we address with observations and recommendations in this month’s report.”
The year started with average daily rate (ADR) down in both channels, leading to a fall in net revenue. ADR climbed close to 2008 levels in the GDS as the year continued, leading to positive revenue movement of 5.34% for the second straight month year-on-year.
But a “colossal” increase in bargain-hunting and online shopping through the ADS left 2009 net revenue for the channel 21.92% below the 2008 year-end.
Look-to-book ratios for the ADS continued to climb, growing 17.8% in December 2009 versus December 2008, and 54.7% over October 2008.
This indicator relates directly to the rise in ADS booking volumes, as well as the channels’ depressed ADR, according to Pegasus.
“Current indications are that look-to-books will continue to rise as travellers become increasingly rate conscious and savvy,” the company said.
“We’re enthused to see positive movement in booking volumes and ADR, but the rising look-to-books portends more pressure on technology infrastructure for travel suppliers,” said Kistner.
“Not only does this competitive shopping environment require an aggressive dynamic rate strategy, but the ability to also handle the immense number of rate and availability requests to your system.
“Rate and technology providers will need to ensure they are capable of returning the high volume of requests in the expected time, which some studies say is as little as two seconds.”
The Pegasus View for December 2009 is available in its entirety online and by free subscription at www.pegs.com.
by Phil Davies
Phil Davies
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