Looking for a Hotel Room? Prepare to Pay, if You Can Find It

If you have been looking for a hotel charging last year’s rates in this year’s chaotic summer travel climate, you have no doubt passed the “shock” stop and moved into the zombie booking phase. What you are not doing is landing in a destination and crossing fingers for finding a room at the inn. 

Global hotel occupancy levels for April and May alone exceeded pre-pandemic levels, and sky is the limit for the numbers that will come in for June, July and August. Amadeus, a hotel reservations software and  technology company, notes transient average daily rate (ADR) achieved on room bookings globally has increased by 11% over 2019 with the majority of hotel bookings still being made within a week of travel. 

According to Amadeus’ Demand360® business intelligence data, hotel reservations met  pre-pandemic 2019 booking in March this year. April was the break-out — the first month to surpass 2019 occupancy levels and those numbers continued to climb in May hitting a new high of 63%, compared to 60% in May 2019. High performing countries like the US saw occupancy levels of 68% in May, 7% above 2019’s performance, while Canada reached 64% occupancy in May, 8% higher than the same time in 2019. Forward looking on-the-books data tells a similar story globally with the summer months tracking above 2019 levels. 

What’s more, the data shows a significant majority of trips (54%) are currently being booked 0-7 days before travel, which means that hotel occupancy rates currently recorded for the summer months could, and likely will, increase significantly. In the case of the US travel market, 55% of bookings are made less than a week prior to travel. Europe is generally slightly more predictable with over a third of bookings (France 33%, Germany 35%, Spain 36%, and UK 39%) made within 0-7 days.

And those mounting reservations and high demand behaviors are showing up in the hotel rates. The transient ADRhoteliers are able to achieve has been building steadily from a global low of $83 in April 2020. According to forward looking Amadeus data for June, July, and August 2022, the worldwide average ADR is $200 which is just over 11% higher than in 2019 where the average ADR was $180 for the same months. Individual countries are seeing high room rates over the summer, with France forecasted to hit an ADR of $428 in July 2022, which is a 29% increase on 2019 rates.

The news is certainly good for hotels, many of which had to close or sell or suffer heavy losses over the past two years. 

“It is fantastic to see the revival of travel that is underway,” said Francisco Pérez-Lozao Rüter, President, Hospitality, at Amadeus. This is where technology plays such a crucial role in helping hoteliers manage daily operations as efficiently as possible.”

“The comprehensive historical and forward-looking travel data will be instrumental in helping the travel sector strategize and prepare for a summer surge,” added Katie Moro, Vice President, Data Partnerships, Hospitality, Amadeus. “The data clearly shows the proportion of travelers that are booking in the last 7 days before travel, for example, which should give hoteliers the confidence to keep their room rates steady and not be tempted to drop them to attract more business.”

The data also looks at what is happening globally with car rental availability and pricing, which is also showing increasing worldwide demand with 33% more bookings made for the months of June, July, and August compared to the same time in 2021. Rental lengths are also up in 2022 over 2021 (6 days vs 5 days on average), with a higher average daily rate of $102 vs $92. Based on 2021 performance for the summer travel season, 54% of bookings were made within a week of travel, which provides significant opportunities for car rental volumes to grow.

In seeking to identify where most of this travel-focused demand is originating, hoteliers, destination management organizations (DMOs), and travel sellers are tracking Amadeus data closely to see which countries are booking the most flights to their markets, and where additional marketing could help drive demand. According to Amadeus air booking data as of June, the US leads all countries in top inbound flights for the forthcoming summer months, followed by the UK, France, Germany, and then Canada.