Eyjafjallajokull Helps European Hotels’ Net Revenue Explode

Pegasus Solutions has issued a special edition of The Pegasus View detailing the unexpected bonus to the European hotel industry that resulted from more than 100,000 flight cancellations during the week of 14 - 21 April 2010.

 As continued Volcanic activity in Iceland has led to even more airport shutdowns this week, Pegasus’ raw data indicates the aviation industry absorbed the brunt of the Eyjafjallajokull ash cloud’s negative financial impact, while some European hotels realized triple digit jumps in revenue.

Acknowledging that the net effect on individual hotels will naturally vary, the report taps Pegasus’ GDS and ADS data, comparing European reservation volumes from 14 to 21 April to the same respective day of the week in 2009. Some of the findings are not surprising, such as a 22% drop in length of stay (LOS) on 17 April as stranded weekend passengers opted for as short a stay as possible.

Other conclusions were surprisingly positive, according to Mike Kistner, chief executive officer of Pegasus Solutions. “This period saw a substantial rise in cancellations, peaking at more than +508% on Sunday the 19th,” said Kistner. “However, our analysis of activity by date of arrival also saw increases in bookings of as much as +135%, with an accompanying rise in average daily rate, which has been the bane of the hotel industry of late. Increased walk-in rates paid by stranded travelers boosted ADR more than +10% over 2009 for four days straight, allowing net revenue for the period to increase as much as +120%. Stressful? Yes. Profitable? You bet.”

The Pegasus View volcano special edition includes data and analysis by date of booking and date of arrival for France, Germany, Spain, the U.K., and Europe combined.

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