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Travel Management

 November 02, 2011
Egencia Releases 2012 Forecast & Hotel Negotiability Index For Corporate Travel

 Egencia, an Expedia, Inc. company, has unveiled its 2012 Corporate Travel Forecast and Hotel Negotiability Index, finding that airline average ticket prices (ATPs) and hotel average daily rates (ADRs) for top corporate travel destinations will be slightly up overall in North America and Europe, with the most significant increases to occur in the Asia Pacific region. Egencia's Hotel Negotiability Index also suggests that corporations will continue to face a weak to moderate negotiating environment in 2012 across the Asia Pacific region.

Based on Egencia's 2012 Global Corporate Travel Forecast, ATPs overall for corporate travellers to top business travel destinations are expected to be:

- Slightly to moderately up (6%) in Asia Pacific destinations
- Slightly up (4%) in North American destinations
- Slightly up (4%) in European travel destinations

The hotel environment continues to show signs of year-on-year growth relative to increased corporate demand, resulting in improved hotel occupancy worldwide. In key destinations for 2012, Egencia forecasts average daily rate increases in:

- Asia Pacific (up 7%)
- North America (up 5%)
- Europe (up 2%)

"We are predicting India will offer a diverse corporate travel landscape next year. In India we will continue to see overall growth of the corporate travel market as a response to the Asia Pacific growth rates, ATPs are increasing in contrast to decreasing ADRs," said Gaurav Sundaram, Country Director Egencia India.

"In this complex travel landscape, we work with our clients to ensure they are well informed and leveraging the right tools and technologies to optimise their travel programs and attain maximum cost control."

APAC Outlook

ATPs

ATPs for Asia Pacific are likely to increase in almost every destination we analysed, signifying growth for the region. Rising demand and prices in business travel correspond with Asia Pacific GDP growth expected to average ~4.0% , except for China and India which are expected to grow 9.0% and 7.5% respectively according to the IMF World Economic Outlook Database. India's top business hubs of Delhi and Mumbai have increased significantly in comparison to the rest of the region at 8 percent and 11 percent respectively.

ADRs

High occupancy rates and limited supply in the region in relation to the demand is impacting the flexibility of negotiating corporate rates. However, new supply growth in Asia Pacific is stronger than the rest of the world and is now catching up to demand growth. Indian cities Delhi and Mumbai ADRs have both decreased, with occupancy rates in continued decline for Mumbai, and Delhi occupancy returning to normal rates after the increased demand spike during the 2010 Commonwealth Games. The availability of good quality hotels at relatively good prices continues to be an important factor in maintaining India as a key business destination.

Asia Pacific ADRs are up overall year over year, showing particularly strong growth in key business hubs of Hong Kong (up 15%), Singapore (up 11%) and Sydney (7%), presenting challenges to negotiating corporate rates.

Travel Management Trends

Egencia surveyed more than 250 travel buyers in Asia Pacific, North America and Europe regarding cost control measures, travel spend, technology trends and expectations for 2012. According to survey respondents, 40 percent of buyers have slightly or significantly increased travel over the last 6 months, compared with just one third of buyers last year signaling a continued rise in overall travel demand.

Mobile

Mobile devices are becoming increasingly important to today's travel managers, with 70 percent of respondents saying that mobile devices/functionalities are moderately important to very important to their travel programs. Respondents identified the following as the most important uses for mobile technology during business travel.

- Check flight status (77%)
- Online check-in (77%)
- Urgent destination/flight alerts (60%)
- Review latest itinerary (59%)

"With over 5 million new subscribers a month in India for smart-phones, we understand the needs of the business traveller have evolved. The release of Egencia Mobile for the iPhone will deliver global best in class experience and technology solutions to Egencia clients in India. This will soon be extended to all other smart phone platforms like Android, Blackberry & others" said Gaurav Sundaram, Country Director Egencia India.

Social Media

While mobile device use continues to gain popularity amongst travel managers and their travellers, social media appears to be a lesser priority with 71 percent of travel managers saying they do not use social media tools to communicate with their travellers. This number is anticipated to decrease as mobile and social continue to become increasingly symbiotic.

Traveller Duty of Care

Only 38 percent of respondents cited that they have a formal traveler duty of care or security program in place for their travellers.

You can download the full 2012 Corporate Travel Forecast and Hotel Negotiability Index, including considerations for travel buyers here: http://www.egencia.com/daily/home/docs/2012_Travel_Forecast_US_Final.pdf

Research Methodology

Data and insight 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 Egencia Internal Data were used for market-level analysis of pricing.

www.egencia.com