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July 29, 2010
GDS hotel bookings in June jumped 23.5 percent year over year and average daily rate grew 6.3 percent, according to Pegasus Solutions. In North America, hotel ADRs for bookings in global distribution systems increased 3.3 percent. The 7.5 percent growth outside North America represented "the highest ADR growth year-to-date," according to Pegasus. "Increasing
demand witnessed by healthy booking volumes indicates there is yet more room to raise rates and realize additional revenue potential."
July 22, 2010
Starwood Hotels & Resorts reported net income of $114 million, down 15 percent year over year. Worldwide systemwide average daily rate increased 1.6 percent to $158.54 from $156 the year before while occupancy climbed 7 percentage points to 68.8 percent. Overall group rates booked for 2010 rose 16 percent whereas corporate transient was the "primary driver of
demand" and remained "robust," according to CFO Vasant Prabhu. During the quarter, midweek occupancies in Boston, Chicago and New York City topped 90 percent and rates increased roughly 5 percent--leaving room for Starwood in 2011 to increase corporate rates that fell about 20 percent since 2008, according to Prabhu. "While raising rates is not something that delights customers, this is a business that is determined by the supply-demand balance. As retail rates rise, corporate negotiated [rates] will need to rise too," said Prabhu. "In our case corporate negotiated rates are clearly one of the factors that are holding back ADR growth this year. Therefore [Starwood] would look for high single digit increases in our negotiations later this year."
July 22, 2010
JetBlue Airways posted a second-quarter net profit of $30 million, up from $20 million a year earlier. It also reported its "highest-ever quarterly operating income" at $94 million and "record revenues, reflecting an improved
demand environment," according to CEO Dave Barger. Average fare increased nearly 10 percent to $139.02.
July 21, 2010
American Airlines parent
AMR Corp. posted a second quarter net loss of $11 million, much smaller than the $390 million loss a year earlier. The company achieved its first operating profit since 2007, at $196 million. According to Tom Horton--recently promoted to president from CFO--the second quarter produced "significant increases in
corporate revenues that far outpaced our first-quarter year-over-year improvements."
July 21, 2010
US Airways Group reported second-quarter net income of $279 million, up from $58 million a year earlier and the "second-highest quarterly profit since our 2005 merger" with America West Airlines. According to president Scott Kirby,
corporate revenue during the quarter increased 42 percent year over year but still was down 2 percent versus 2008. "In June, for first time this year,
corporate revenue was up versus 2008," he added.
July 21, 2010
Corporate room nights booked in the second quarter by Host Hotels & Resorts properties rose 11 percent, corporate rates grew 6 percent and corporate revenue increased 18 percent, the company announced. "Special" corporate room nights rose 33 percent. Association and corporate group booking rates in lower-tier segments grew 121 percent, while overall corporate group business climbed 16 percent. For 2011, Host is "sending the message" that higher rates are to come and although "that message is being accepted corporate customers," that "doesn't mean it will ultimately be negotiated," according to CEO W. Edward Walter. The company reported second-quarter net income of $20 million compared with a loss of $69 million a year earlier. Overall average daily rate decreased to $175.47 from $177 whereas occupancy climbed to 74 percent from 68 percent.
July 20, 2010
UAL Corp. reported its "first quarterly profit since 2007" with net income of $273 million. Excluding one-time items, $430 million marked "the largest second quarter profit since 1999" and a $751 million year-over-year improvement, said CEO Glenn Tilton. According to president John Tague, "Year to date, United is the only major U.S. network carrier to generate positive unit revenue growth compared to 2008." He cited strong corporate and premium cabin booking trends and "continued pricing improvements quarter over quarter."
July 19, 2010
Delta Air Lines posted a second-quarter net profit of $467 million, reversing the net loss of $257 million from a year earlier and marking "our best result in a decade," according to CEO Richard Anderson. Passenger revenue and unit revenue each increased by 19 percent, and
corporate revenue jumped 60 percent year over year.
June 15, 2010
Delta Air Lines in May collected 63 percent more corporate revenue than it had a year earlier on 35 percent higher corporate ticket volume, according to president Ed Bastian. Speaking Tuesday during the Bank of America Merrill Lynch 2010 Global Transportation Conference, Bastian said the differential between the two metrics reflects "the amount of pricing traction we are seeing in the market, which is significant." As with other U.S. carriers,
Delta's corporate client activity continues to recover rapidly from recession-depressed levels throughout 2009.
June 9, 2010
Marriott's average daily rate at North American company-operated properties during its most recent accounting period including May increased 1 percent, "the first room rate increase in nearly two years," according to the company. Speaking during the New York University International Hospitality Industry Investment conference, Marriott president and COO Arne Sorenson said "
demand has come back aggressively" and corporate rates in 2011 likely would increase. "We have had a few months of pretty stunning numbers," he said. "If you look at the cycles in this industry, the years after recessions have been spectacular."
May 26, 2010
PKF Hospitality Research predicted average U.S. daily hotel rates would drop 1.6 percent in 2010 but occupancy levels would increase 3.4 percent. The "surge in occupied rooms foretells the start of a strong comeback in the
demand for lodging," according to PFK president Mark Woodworth. "The magnitude of the turnaround was a very pleasant surprise. Such a large increase in lodging
demand suggests a return of pent-up travel that did not occur in 2009." Hoteliers in 49 of the 50 markets covered by PKF's report experienced occupancy gains during the first quarter of 2010 compared with 2009.
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