Expedia’s average hotel rate climbing fastest this year


The average daily rate (ADR) for U.S. hotels booked on Expedia in the first half of 2011 was 6.2% higher vs. the same period last year, the story says, citing Expedia’s figures.

That more than the 2.4% ADR hike recently projected for the full year by PKF Hotel Horizons, and more than the actual 3.4% ADR increase seen by Smith Travel Research during the first half of this year, the story says.

So, what’s happening? And does this mean that you’ll pay $190 for a Marriott, Hilton, Sheraton or Hyatt mid-week in a major city on Expedia, but less on another site? No.

The faster average daily rate growth – a key word here – on Expedia reflects a variety of factors, according to Amy Severson, Expedia’s director of strategic accounts and industry relations who spoke with Hotel Management. Here are the interesting factors involved in the trend:

  • Type of hotels booked on Expedia: Expedia bookings consist of a higher percentage of hotels rated three stars and higher (about 65%), which as a category has seen larger rate gains than hotels overall.
  • Expedia customers’ booking habits: Expedia customers don’t necessarily book the lowest price in a given star rating category. Severson cites this example: On Expedia’s busiest, non-holiday weekend for Las Vegas this year so far, over half the customers booked rooms in the mid-to-high range of available rates vs. the lowest-available rate.
  • Booking window patterns: Most people use Expedia for leisure bookings and leisure travelers tend to plan and book in advance. This helps skew average daily rate growth (though not necessarily average daily rate itself), because ADR growth is highest 61-90 days out, she says. It’s up for this specific period by more than 9% year-over-year, where as ADR growth for bookings in the 0-6 day advance range is up by just 4%.

In Manhattan – the USA’s most expensive hotel market – the average rate booked 61-90 days out primarily by leisure travelers is 18% higher than a year ago, she says. People who are booking 0-6 days out, however, (primarily business travelers) are paying on average only 2% more than a year ago.

“If hoteliers can use our marketplace to secure a really nice base, that allows them to raise rate as the consumer books closer in,” she told Hotel Management.

About Swiss Hotel & Resort Consulting

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