Hotel Industry Weathering Financial Storms Well – So Far

During the week ending 6 August—the same week Congress reached an 11th-hour debt-ceiling compromise and the Dow dropped 500 points—revenue per available room still grew by 4.8%, according to HotelNewsNow.com’s parent company STR. The following week saw an identical gain, and the week ending 20 August posted a RevPAR increase of 7.6%.

What do the numbers say?
At the request of HotelNewsNow.com, Pegasus Solutions pulled data on daily electronic bookings made through the GDS and ADS channels from 1 July through 14 August. The analyses found no apparent volume or pattern changes in cancellations globally or regionally.  Pegasus found no significant dips in corporate bookings, either.

“Businesses are still seeing earnings and cash-flow improvement, which bodes well for travel spend,” Parodi said. “Corporations are reluctant to give up travel spending because they do understand the value and the competitive edge of that face-to-face travel.”

However, ADS channel results during this time period did suggest a potential slowing in leisure bookings compared to the prior year for North America andEurope. Slower booking activity was more discernable during the first part of the week (9-10 August) in North America and 8-11 August inEurope.

“It’s a rollercoaster ride right now in the financial markets, and that ride has not come to a stop right now,” Parodi said.

At press time, the Dow Jones Industrial Average was down 88.25 points to 11,061.57. Since 1 August, theBaird/STR Hotel Stock Index is down 20.1%, closing Thursday at 1693.99.

In theU.S.at least, financial volatility had no discernable impact on bookings for the Labor Day holiday weekend.

“Bookings seem to show an increase by roughly 7% over last year on average for the Friday through Monday of that weekend,” Parodi said. “(Average daily rate) seemed to be still staying ahead of last year. That’s promising news for the travel weekend ahead and suggests that people do not log on to their iPads or mobile phones to make cancellations because of this news.”

The real test, however, will be in the months ahead.

(The above is a article that recently appeared in HotelNews.com, with half of its paragraphs edited out, to get to blog length.)

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