Leisure travel is recovering, very leisurely

By Reuters
Posted Jan. 20 at 1:09 p.m.

Leisure travel is recovering from the recession, but at a slower pace than business travel, according to a company that makes reservations for travel agents and Web sites.

Monthly revenue from leisure travel hotel reservations through June will rise an average of 14 percent from a year earlier on average, according to Pegasus Solutions Inc.

Corporate travel reservation revenue, however, will rise an average of 59 percent over the same six-month period compared with last year.

Business travel accounts for a bigger slice of the market than leisure. At expensive hotels such as those operated by Marriott International, 80 percent of the guests are usually business travelers. The breakdown is more balanced at less pricey lodgings, with about 60 percent business travelers .

Pegasus, which serves the 10 largest U.S.-based travel agencies, made its predictions during a conference call with FBR Capital Markets lodging analyst Patrick Scholes Thursday. Pegasus Chief Operating Officer Ric Leutwyler and Julie Parodi, a director of analysis, participated.

“The leisure business is still kind of soft,” Scholes said. ”The recovery in U.S. hotels is still being driven without a doubt by corporate travel.”

Pegasus has the largest hotel transaction database, and spoke about it to investors for the first time with Scholes. Its data is an indicator of demand for lodging, travel and cruise ships.

Leisure travel reservations will rise between 17 percent and 23 percent during March, April, May and June, according to Pegasus.

That increase in demand eventually will support higher room rates, Scholes said.

Average daily hotel room rates for leisure travelers, however, will rise 4.8 percent even at their highest, in April, and will fall by 2.1 percent in June, Pegasus said.

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