GDS feels the effects of the economic slowdown

PRLog (Press Release) - Jan 28, 2009 -
The first half of 2008 saw healthy growth for Global Distribution Systems (GDS) room nights and average daily rate (ADR). However, since June, room nights have fallen and, since October, ADR has also fallen. This downward trend is set to continue into 2009, according to research carried out by Great Hotels Organisation (http://www.ghorg.com), a global hotel sales and marketing company.

From late quarter two and early quarter three of 2008, hotels in most major European cities experienced a slump in the number of room nights and ADR in comparison to 2007. Hotels in Paris, London, Barcelona, Amsterdam, Lisbon, Berlin and Athens have generally experienced a drop in GDS room nights from the middle of 2008 and a decrease in ADR from around September and October, with November being hit the hardest. It is likely that 2009 will continue to see ADR and room nights falling.

London hotels were amongst the worst affected, with room nights falling consistently since May in comparison to 2007 and ADR falling consistently since August. November saw a difference of almost 30% in ADR compared to 2007.
Cyprus has also been badly affected, seeing a general drop in room nights since May. In November, ADR fell by 27% in comparison to November 2007.

Even with this general negative trend, the Middle East continues to experience healthy GDS business growth. Abu Dhabi has seen favourable GDS growth in terms of room nights and ADR throughout 2008 and will see yet more aggressive growth in 2009. A contributing factor to Abu Dhabi’s success is the expansion of the UAE’s national airline, Etihad Airways, meaning an increased number of flights to the city.

Despite indications that the economic climate is having an impact on ADR and room nights globally, hoteliers need to prepare to face the challenge and ensure that their hotels have strategies in place to maximise existing demand.

Yunna Takeuchi, Director of e-Distribution at GHO, says: “We are already taking measures to ensure that hotels represented by us on the GDS, G-Rez (http://www.g-rez.com), are implementing strategies that will help tackle the slowdown in demand. It is very important that hotels are well prepared to continue to face the difficult times ahead and that any strategies put into place to tackle the short term do not compromise long term objectives. These objectives are important so hotels can recover ADR and room nights and are set for business growth once the economy recovers. We don’t only provide technology, but also vital strategic advice to ensure hotels receive maximum bookings through the most important channels, which is especially welcomed by our hotels during times like these.”