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Travel Management

 June 28, 2012
Egencia 2012 Corporate Travel Global Benchmarking Study & Travel Manager Research

 Egencia, an Expedia, Inc. company, has 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.

"We want to ensure our customers succeed in today's challenging economic environment, and that they have the right tools to optimize their business travel programs and policies to the best of their ability," said Rob Greyber, President, Egencia. "This study does just that -- it provides businesses with key insight into air, hotel and car rental pricing in today's market, with tips on how to navigate successfully through constantly evolving business travel challenges."

The study reveals that companies are sending their employees on the road again, tempered by a growing emphasis on cost control and efficiency for corporate travel. Based on Egencia's Q1 global supply research, the following is a summary of the 2012 pricing environment:

- For air travel, ATPs for intra-APAC destinations increased 3% YoY. The mixed pricing landscape can attribute increased ATP's to increasing cost pressures and strong domestic demand keeping rates high.

- For air travel, North American points-of-sale, ATPs for North America showed increases approximately 6% in nearly all business destinations due to increasing cost pressures, especially higher fuel prices and a limited increase in supply.

- For air travel, European points-of-sale, ATPs (Average Ticket Prices) for European destinations increased nearly 6% YoY (compared to a decrease of 8% YoY in 2011). The increased ATPs can be attributed to rising fuel prices and tightly managed capacity by airlines.

The hotel environment worldwide experienced an Average Daily Rates (ADRs) increase in the majority of destinations. ADRs increased an average of 5.7% Asia-Pacific, 6% in North America and 3.3% in Europe.

"Asia-Pacific growth has moderated and savvy companies are well aware of the volatility of the market. As a result, we're seeing less international travel with a shift to a more intra-APAC focus," said Cecilia Routledge Managing Director Egencia APAC. "Even though ATPs and ADRs have increased, opportunities for savings can still be found. Greater emphasis is being placed on conservative policies -- travelling domestically or with LCCs and seeking out lower tier hotels just outside of the business hubs."

Average Ticket Prices (ATPs)


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.


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) with some of the highest occupancy rates in the world, limited supply will continue to fuel ADR increases.

Travel Management Trends

According to respondents of Egencia's global survey of over 300 travel buyers, 43 percent of buyers expect their travel volumes (number of trips) to increase during the remainder of 2012 (compared with 54 percent in 2011) with 46 percent expecting their overall travel spend to increase. Additionally, 62 percent 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 traveller compliance/policy enforcement (40%)

Even as companies try to hold the line on travel spending, they are also mindful of traveller satisfaction; possibly attributing to an increasing willingness to bump their travellers to front of cabin travel (business/first class) on flights lasting more than nine hours. In fact, Egencia found that 45 percent of business travellers are permitted to travel in front of cabin seats on flights over nine hours, compared to just six percent of business travellers 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