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Based on hotel industry bookings as of July 3, 2011, revenue per available room (RevPAR) for the future 12 months is 6.1 percent higher than the same time last year. Performance trends showed moderate year-over-year RevPAR improvement during the two months before the holiday calendar shift skewed demand in September (9.8 percent) and October (3.3 percent). RevPAR grew for 18 consecutive months, including a 6.1 percent year-over-year increase in June.  

For the second month in a row, the primary driver of results was average daily rate (ADR), a cyclical shift from the occupancy-led results reported over the previous two years. ADR is up 3.7 percent year-over-year for the next 12 months, ranging from a low of 2.7 percent year-over-year growth in July to a high of 6.8 percent year-over-year growth in September for the balance of the year. U.S. hotel industry RevPAR growth averages an increase of 6.6 percent year-over-year for the full year 2011, moderating from an increase of 6.8 percent during the first half to an increase of 6 percent during the second half of the year, with ADR increasing by 2.9 percent and 3.6 percent respectively.

The metric of time for the hotel industry can be calculated using two significant measures—the booking window and length of stay. First, we evaluate the ever-changing booking window by reviewing industry trends from the last couple of years. With the rise in popularity of flash sales and mobile devices, many industry experts believe that travelers increasingly wait until the very last minute to book.

However, TravelClick data proves that booking windows are lengthening at this point in the hotel cycle. During the second quarter of 2011, the industry booking window increased for the fifth straight quarter to average 19.8 days, a 2 percent increase from last year with the group reservations average (34.7 days) more than double transient average (15.3 days).


This change in pace and emerging channels, coupled with the economic environment and price transparency, requires flexibility throughout the entire revenue management cycle. Revenue maximizers often rely on length of stay distribution statistics stored statically in a database. These distributions not only change seasonally but also vary throughout the booking window as the number of days to arrival counts down to zero.

Across the nation, length of stay declined 0.9 percent year-over-year to average 2.21 days during the second quarter. This was the first shortening of the ratio since the third quarter of 2009, indicating that with comparable demand up 2.7 year-over-year, the frequency of trips grew but guests stayed for a shorter period of time.

What does this mean for revenue managers? It is important to pay keen attention to both the booking window and length of stay patterns when forecasting. The charts below compare transient customer booking behavior, by source, for additional insight. Voice (CRS) was the only distribution channel to report a year-over-year booking window decrease during the second quarter. The OTA channel (93 percent leisure) booking window increased over the prior year for the first time since Q2 2010 and the average LOS for this channel declined over the prior year for the fifth straight quarter. Business customers accounted for eight out of 10 hotel rooms sold through the hotel industry’s GDS (travel agent) channel. Considering the market mix, it is no surprise that the health of GDS booking window and length of stay measures are among the central channel leaders.

While insights into the booking window and length of stay patterns via channel provide visibility into guest behavior, using these Hotelligence360 data points can specifically address future performance opportunities or target marketing to promote desired outcomes. Terabytes of transaction-level data present a complete view of each room-night up to 12 months into the future, providing a lengthened window of opportunity to improve financial results faster than competitors.

Lloyd Biddle is strategic manager at TravelClick.

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