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Business and Leisure Hotel Revenue Expected to Climb into 2014

Summer travelers drove greater revenue than last year to the majority of hotels in leisure and business

markets worldwide. Looking forward, autumn and the holiday season are positioned for revenue growth

over 2012 as well. Corporate revenue through the global distribution systems (GDS) ended third quarter

2013 up +4.5% over prior year for September, and up +3.0 year-to-date through September. Companies

are continuing to utilize travel, and more willing to increase travel spend and trips.

Leisure travel continues to show strong demand reflected by a gradual rise in consumer confidence and

willingness to vacation. Leisure trips booked through the alternative distribution systems (ADS)

generated +3.0% more revenue than last year for September, and +4.6% more year-to-date. This was

propelled by rate growth averaging +4.7% over the summer.

KEY TAKEAWAYS

Global corporate revenue gains were primarily driven by greater bookings because of increased

travel activity, with rates playing a supporting role.

Leisure travel demonstrates impressive ongoing strength, with revenue primarily stemming from

rate gains accompanied by substantial volume.

Global GDS forward-looking data shows corporate travel will deliver dependable volume and rates

through the start of 2014.

Global ADS forward-looking data shows booking and rate growth for the upcoming holiday season.

Third quarter 2013 results and future stays portend gradual but certain improvement overall for the rest

of the year and into next year. Trends analyzed in The Pegasus View and reported by other industry

sources indicate strong and inherent demand for business and leisure travel that will sustain despite

economic challenges. Hoteliers, however, must take an active role in their own performance. Attracting

more international and domestic guests requires a strong presence and consistent access to consumers

across all channels and devices.

GDS CHANNEL (CORPORATE TRAVEL FOCUS)

Corporate individual and group travel continued to grow for the third quarter of 2013 globally.

September closed the quarter with a solid increase of +4.4% over prior year, and an uptick from the

already solid +3.0% year-to-date growth. Average daily rates (ADR) remained a key contributing revenue

factor, continuing to edge past prior year rates by +0.3% in September and +0.6% year-to-date.

Business travel spending is on the rise, not simply because of higher rates and airfare, but because more

trips are being taken as well. Corporate profits are improving in general, but companies are still cautious

with spending. Some, particularly in industries such as technology and professional services, have excess

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cash. As travel is recognized for its role in sustaining and increasing market share, companies are adding

trips to capitalize on prime opportunities.

Travel continues to evidence prudent length of stay and consistent booking lead times, which enables

more trips. The global average length of stay was 2.12 nights in September and 2.15 nights year-to-date,

both nearly equal to prior year. Global average reservation lead time for September was 16.13 days

versus 16.22 in September 2012. Year-to-date, lead time has shortened from 17.72 days through

September 2013 versus 17.96 days as of September 2012.

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ADS CHANNEL (LEISURE TRAVEL FOCUS)

Leisure demand drove greater global revenue during the summer and through third quarter 2013, which

will sustain greater returns into autumn. July bookings were challenged against a relatively robust

performance last year. Volumes rose to meet that challenge in August, and inched up by +0.6% in

September. Meanwhile, rates continue to outperform prior year, growing by +2.8% year-to-date. They

reached an average of +4.7% over the summer, leading to a +2.1% increase in September.

Leisure travel remains a staple for consumers, making strides across most regions. Coming off of a peak

vacation season and with holiday travel ahead, family trips will help drive demand. A recent survey from

Holiday Inn Resorts, which interviewed both kids and adults, reinforced that time-starved families are

overstressed and overscheduled, with even kids feeling the need for a vacation. An unsurprising 97% of

kids believe they deserve a vacation, and 98% think their parents do too. Top cited destinations for

families were theme parks (29%), beaches (23%) and large cities (23%), with top considerations being

good value for money spent and new experiences, regardless of destination.

Consumer confidence is displaying gradual improvement in many areas, fueling small increases in trip

length and booking lead times. The global average length of stay for trips booked in September was

17.74 nights versus 17.23 nights last year. This represents a +0.4% increase, which is slightly greater than

the +0.1% increase year-to-date. Average stays were at 19.40 nights for January through September

2013, versus 19.13 for January through September 2012.

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GDS & ADS CHANNEL PERFORMANCE BY REGION

Business and leisure travel demand remain resilient worldwide. Corporate travel booked through the

GDS channel displays reservation gains across most regions, with firm rates across all. Leisure

reservations are rising at various paces in most regions, and even regions such as Europe, are improving.

September came within -4.4% of prior year, improved from the -5.5% decrease year-to-date. Much of

this gain stems from countries such as the UK, France and Germany. PhoCusWright research reveals that

during the past 12 months, 78% of adults in the UK took at least one vacation, up three percentage

points over the previous year. In France, 70% of adults took a vacation as did 72% of adults in Germany.

Increased international tourism and airline demand are both a benefit and testament to business and

leisure travel. According to the latest UNWTO World Tourism Barometer, international tourist arrivals

between January and August grew by +5% to reach a record 747 million worldwide. This 38 million gain

over the same period of 2012 was driven by strong results in Europe, Asia Pacific and the Middle East.

The International Air Transport Association (IATA) reflects strengthening demand overall, namely for

international travel. Passenger demand, business and leisure combined, rose by +5.2% year-to-date

through August for international travel and +4.8% for domestic.

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FORWARD-LOOKING INDUSTRY TRENDS Global GDS forward-looking data points to more increases in business travel ahead. October reservation

growth may pause, but moderate gains of approximately +3% are suggested for November and

December until easing closer to prior year in January. Rates look to dependably support revenue,

remaining at or above prior year through the start of 2014.

ADS channel forward-looking global data suggests leisure travel will rally for the upcoming holiday

season. Reservation growth shows a probable reprieve in October and November globally, but looks to

rebound in December and January when growth potential ranges between +5% and +9%. Bookings will

continue to be made at higher ADRs than last year globally, continuing at increases of about +2% to +3%

through December, with a smaller margin above prior year in January.

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About The Pegasus View

The Pegasus View is a quarterly analysis of global booking trends available online and by free subscription at

www.pegs.com. Data reported in The Pegasus View comes from billions of transactions processed monthly by

Pegasus Solutions, the world’s single largest global processor of hotel transactions. It is the only industry report to

reflect data drawn from both global distribution system (GDS) and alternative distribution system (ADS)

transactions, representing the business and leisure markets respectively for approximately 100,000 hotels

worldwide. All data is on a date-of-booking basis unless otherwise stated. Average daily rate (ADR) and revenue

percentage changes are calculated from values using a single constant exchange rate to eliminate the effects of

currency exchange rate movements.

About Pegasus Solutions

Pegasus Solutions is the single largest processor of electronic hotel transactions, delivering advanced and

affordable connectivity and distribution solutions to nearly 100,000 hotels worldwide. Pegasus connects hotels to

crucial sources of business, facilitating almost $16 billion for its clients annually. In addition to foundational global

distribution system (GDS) access and online connectivity, Pegasus delivers online, social marketing and booking

solutions through its Open Hospitality division, and powerful reservation tools to convert and capture bookings. As

a trusted partner in generating guest room demand and sales, Pegasus also offers hotels actionable business

intelligence through its PegasusView Market Performance reports to help hotels understand and respond to

changing market conditions.

Pegasus has 18 offices in 10 countries, including regional hubs in New York, Dallas, Scottsdale, Frankfurt, London,

Madrid, Sao Paulo, Tokyo and Singapore. For more information, visit www.pegs.com or www.openhospitality.com.

David Millili CEO, Pegasus Solutions

Julie Parodi Vice President of Sales Operations and

Editor, The Pegasus View