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Recovery Continues as Leisure Travel ADR Shows Positive Growth

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Leisure travel average daily rate (ADR) has shown positive growth for the first time globally since the recession hit, increasing just over +1%, according to July’s The Pegasus View from Pegasus Solutions.

The monthly report, issued on the first anniversary of the inaugural The Pegasus View, draws data from billions of transactions processed by Pegasus, one of the world’s largest processors of electronic hotel transactions for nearly 100,000 hotel customers worldwide.

Citing pent-up demand, July 2010’s The Pegasus View also indicates leisure bookings – those made online / through alternative distribution systems (ADS) – entered double-digit growth territory with an increase of more than +10% over last year. Together, the increase in booking volume and ADR helped revenue realize double-digit growth of nearly +12% over 2009.

“We were pleased to see the look-to-book ratio in the ADS slow its growth during July from the +50% we saw in May and June to +35%,” said Mike Kistner, chief executive officer of Pegasus Solutions. “Have leisure travelers stopped shopping for the best value? Certainly not, but they’re definitely more willing to buy. This is evidenced not only by diminished growth of the look-to-book ratio, but also by the very encouraging ADR, revenue and length of stay growth we saw in the ADS channel. As corporate travel has led the recovery, hotels need to make sure they haven’t forgotten how to woo the consumer. As we see it, they’re back too.”

Around the world, the ADS channel returned similarly positive results, with South America showing the highest revenue increase over prior year of +62.7%, and North America the smallest of +8.2%. Europe ADS revenue grew +29%, while Africa/Asia/Oceania by +23.7%.

Global corporate bookings – those made through the Global Distribution Systems (GDS) – continued a double-digit growth streak with July up +24.5% over 2009. This volume is expected to continue increasing through the rest of the year at an average monthly pace of +30%, which, combined with an expected ongoing increase in ADR for the channel, will lead to estimated revenue growth of about +40% each month through the end of 2010.

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