Ferguson, VP of lodging demand and analysis for Expedia, shared 10 hotel trends using data generated from hotel bookings on Expedia.
1. Exchange rates are shifting travel patterns. “There are a lot more Americans traveling to the U.K. despite the economy. That’s simply because it has gotten so much cheaper,” he said. “It’s 35-percent cheaper just because of the exchange rate. Add to that the discounts U.K. hotels are giving, and it’s become a bargain.”
2. Consumers are looking for a deal. Year-over-year share of bookings with promotions has increased and will continue to do so throughout the third-quarter of 2009.
3. Promotions matter more than ever. Year-over-year percent change on rooms booked with major promotions has increased in 2009. There were 68 percent more travelers who booked their stays during a 4th of July promotion this year than last year, for example.
4. Promotions are getting more creative. “Before, it used to be all about cutting rates on the sites,” Ferguson said. Now, hotel companies are offering free nights, value-add packages and other incentives to drive demand.
5. Customers who book online are trading up. “Customers are finding that the four- and five-star hotels are getting more affordable.”
6. There are massive swings in online market share. In Nashville, Tennessee, for example, the most booked hotel during second-quarter 2009 jumped 13 spots before landing in that position and increased year-over-year room nights by 413 percent. However, its year-over-year ADR declined by 34 percent.
7. Booking window compression. Travelers are waiting longer than ever before to book their stays.
8. Leisure rates are leading the way. “Leisure rates went down first and are going down more,” Ferguson said.
9. Hotels are using the package channel to fence rates. Examples of this semi-transparent technique including bundling a hotel stay with airfare or a stay with a car rental.
10. Opaque channels are growing faster than non-opaque channels.
Air travel trends
One of the most striking, albeit expected, trends in consumer spending during the downturn has been the shift of discretionary dollars away from travel and moving toward more essential, everyday items such as groceries and medicine, said Gary Portuesi, VP of lodging account development for American Express Merchant Services.
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