BELLEVUE, Wash., June 28, 2012 /PRNewswire/ -- Egencia®, an Expedia, Inc. company, today unveiled its 2012 Global Corporate Travel Benchmarking Study and Travel Manager Research. The study evaluates the current business travel landscape and supply environment for air, hotel and car inventory. Focusing on top domestic and international business destinations in North America, Europe and Asia-Pacific, Egencia analyzed industry trends, supplier data and capacity implications in Q1 2012. Additionally, Egencia surveyed over 300 travel buyers globally identifying current trends and challenges.
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"We want to ensure our customers have the right tools to optimize their business travel programs and policies in today's challenging environment," said Rob Greyber, President, Egencia. "This study provides businesses with key insight into air, hotel and car rental pricing in today's market, with tips on how to navigate through constantly evolving business travel challenges."
The study reveals that average ticket prices (ATPs) for air travel have, on average, increased in North America, Asia Pacific and Europe in the last year, attributed to rising jet fuel prices being passed onto travelers and tightly managed capacity discipline by airlines. Average daily rates (ADRs) for hotel stays have also increased in the majority of business destinations, continuing a reversal of previous trends. Improved occupancy and a decreasing amount of new hotel supply coming into the market has led to slightly higher room prices (approximately 6% in North America, 3.3% in Europe, and 5.7% in the Asia-Pacific region).
"The pricing landscape has made a noticeable – although less pronounced – shift from this time last year," said Chris Vukelich, Vice President, Supplier Relations, Egencia Americas. "We continue to see a return in demand for hotels alongside air. Even though ATPs and ADRs have increased, opportunities for savings can still be found. In addition to the opportune car pricing landscape, travel managers should look to their travel management companies to identify additional savings opportunities in hotel."
Average Ticket Prices (ATPs)
As a result of increased cost pressures in Q1 2012, ATPs have increased for nearly all routes departing from North America by approximately six percent. These increases can be largely attributed to higher fuel prices, tighter management of capacity, and continued airline consolidation.
The chart below illustrates Q1 YoY ATP figures in selected business travel destinations for North American points of sale.
North America POS
ATP Change YoY
2012 Q1 ATP
**ARC data for trans-Atlantic/Pacific flights(NA origin)
ATPs for European destinations experienced an increase of nearly six percent YoY. Increased ATPs can be attributed to rising fuel prices and tightly managed capacity by airlines. Decreased ATPs can be attributed to overall financial vulnerability of the Euro-zone, increased competition from low cost carriers, and increased competition with high speed rail.
Asia-Pacific represents a mixed air pricing landscape, varying on a market-by-market basis. However, as a whole APAC is averaging an increase in overall ATPs. Prices for Intra-APAC destinations have increased by an average of three percent YoY. Increased ATPs can be attributed to increased fuel costs and increased demand into China. Decreased ATPs can be attributed to increased competition in the local markets and increased capacity on a majority of routes, as more and larger aircrafts enter the Asia Pacific region.
Hotel Average Daily Rates (ADRs)
In the first quarter of 2012, hotel ADRs increased in most major business destinations. The increase in ADRs can be attributed to reduced scale of new supply and improved occupancy.
As a result of increased cost pressures in Q1 2012, ADRs have increased for nearly all locations in North America by an average of six percent. These increases can be largely attributed to improved occupancy and a decreasing amount of new hotel supply coming onto the market.
The chart below illustrates Q1 YoY ADR figures in selected business travel destinations for North American points of sale.
ADR Change YoY
2012 Q1 ADR
In Europe, markets that showed solid rate increases include Stockholm (up 9.2%), Dublin (up 6.5%) and Marseille (up 6.3%). Dublin continues to rebound from the massive price falls during the recession, with 2011 growth continuing into 2012. Stockholm also leads in terms of overall ADR growth; rates continue to rise even though occupancy levels there are flat. These gains reflect Sweden's relatively strong recovery from the recession.
ADRs in Asia-Pacific destinations generally increased, especially in Jakarta (up 23.6%), Seoul (up 15.4%) and Hong Kong (up 12.4%). For the top business markets (Singapore/Hong Kong), limited supply will continue to fuel ADR increases.
Car Rental Rates Per Day (RPD)
In North America, rates per day (RPD) have fallen on average by a little over two percent YoY in Q1 of 2012. The decreased RPD can be attributed to the improving supply situation in the marketplace, as financing restrictions become less stringent for vendors.
Travel Management Trends
According to respondents of Egencia's global survey of over 300 travel buyers, 43% of buyers expect their travel volumes (number of trips) to increase during the remainder of 2012 (compared with 54% in 2011) with 46% expecting their overall travel spend to increase. Additionally, 62% of travel buyers said they will negotiate more in 2012 (compared to 38% in 2011).
Travel Managers universally identified cost control/reducing expenses (77%) as the greatest challenge facing their travel programs, followed by traveler compliance/policy enforcement (40%).
Even as companies try to hold the line on travel spending, they are also mindful of traveler satisfaction; possibly attributing to an increasing willingness to bump their travelers to front of cabin travel (business/first class) on flights lasting more than nine hours. In fact, Egencia found that 45% of business travelers are permitted to travel in front of cabin seats on flights over nine hours, compared to just six percent of business travelers on flights lasting less than nine hours. Allowing for business/first class travel may be emblematic of companies wanting to be seen as supporting their employees, not just cutting costs.
The full Egencia 2012 Corporate Travel Global Benchmarking Study and Travel Manager Research can be downloaded here: http://www.egencia.com/daily/home/docs/2012_us_global_benchmarking_guide_final.pdf.
Forecast and projections are based on the statistical analysis of the past and present industry trends, macroeconomic factors, market research and vendors' capacity forecasts for 2012. Smith Travel Research (STR) and OAG filings were leveraged for a market-level analysis of both Lodging and Air capacity. ARC, STR and Expedia Internal Data are used for market-level analysis of pricing.
About Egencia, an Expedia, Inc. Company
Egencia is the fifth largest travel management company in the world. As part of Expedia, Inc., (NASDAQ: EXPE), the world's largest travel marketplace, Egencia helps businesses get ahead by offering the only truly integrated corporate travel service. Egencia's industry expertise helps drive results that matter, delivering meaningful advancements that have a real impact. By combining a powerful offline and online service, Egencia delivers a complete corporate travel offering supported by global market expertise and a best-in-class technology platform. For more information, go to www.egencia.com.
Egencia and the Egencia logo are either registered trademarks or trademarks of Expedia, Inc. in the U.S. and/or other countries. Other logos or product and company names mentioned herein may be the property of their respective owners.© 2012 Egencia, LLC. All rights reserved. CST # 2083922-50