Egencia Releases 2011 Corporate Travel Global Benchmarking Study and Travel Manager Research

ADRs increase in most business destinations, while ATPs experience a mixed pricing landscape.

BELLEVUE, Wash., June 15, 2011 /PRNewswire/ — Egencia®, an Expedia, Inc. company, today unveiled its 2011 Global Corporate Travel Benchmarking Study, evaluating 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 2011. Additionally, Egencia surveyed nearly 350 travel buyers globally regarding travel program expectations, policies and challenges.

“In any successful corporate travel program, information is key,” said Mark Hollyhead, Senior Vice President, Egencia Americas. “It is our goal to inform our clients of current trends, challenges and opportunities, as we feel it is essential that these factors are utilized to fully optimize our clients’ travel policy.”

The study reveals that average ticket prices (ATPs) for air travel have, on average, increased in North America, decreased in Asia Pacific and increased or decreased in Europe based on destination. Average daily rates (ADRs) for hotel stays have increased in the majority of business destinations, reversing previous trends. Increased ATPs can be largely attributed to rising fuel costs, tightly managed capacity and increased demand in some points of sale. Similarly, ADRs have increased in the majority of business destinations due to an increase in demand, reduction in new supply and improved occupancy rates.

“The pricing landscape has made a noticeable shift from this time last year,” said Chris Vukelich, Vice President, Supplier Relations, Egencia Americas. “The once soft hotel landscape is now experiencing a strong return in demand 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 TMCs to identify additional savings opportunities in hotel.”

Average Ticket Prices (ATPs)

North America

As a result of increased cost pressures in Q1 2011, ATPs have increased for most routes departing from North America. These increases can be largely attributed to higher fuel prices, tighter management of capacity, strong demand on major corporate routes, and continued airline consolidation. For travel within North America, ATPs have increased by an average of 13 percent. ATPs for destinations in Europe are up one percent, and down four percent for Asia.

The chart below illustrates Q1 YoY ATP figures in selected business travel destinations for North American points of sale.

Europe

ATPs for European destinations decreased by an estimated four percent YoY, while ATPs to North American destinations increased by eight percent YoY.  Increased ATPs can be attributed to rising fuel prices (although the fuel price in Euros hasn’t risen as much as the fuel price in USD due to currency fluctuations), tightly managed capacity by airlines, and airline consolidation and alliances. Decreased ATPs can be attributed to overall financial vulnerability of the Euro-zone, increased competition from low cost carriers, increased competition with high speed rail, and slowing demand.

The chart below illustrates Q1 YoY ATP figures in top business destinations for European points of sale.

APAC

Asia-Pacific represents a mixed air pricing landscape, varying on a market-by-market basis. However, as a whole APAC is averaging a decrease in overall ATPs. Prices for Intra-APAC destinations have decreased by an average of two percent YoY, with prices for North American destinations down by an average of one percent YoY. Decreased ATPs can be attributed to increased competition in the local markets, increased capacity on the majority of routes, and the domestic and international pricing battle for Australia. Increased ATPs can be attributed to the mixed capacity environment for APAC destinations, increased fuel costs, potential of joint-ventures on trans-Pacific routes, and increased demand into India and China.

The chart below illustrates Q1 YoY ATP figures in top business destinations for APAC points of sale.

Hotel Average Daily Rates (ADRs)

In the first quarter of 2011, hotel ADRs increased in most major business destinations, reversing the downward trends from the previous year. The increase in ADRs can be attributed to the return of corporate demand, reduced scale of new supply, and improved occupancy. In contrast, the meetings & incentive business has yet to recover in several markets, and high fuel prices have cut into some discretionary income.

The charts below illustrate Q1 YoY ADR figures in selected business travel destinations globally.

Car Rental Rates Per Day (RPD)

In the United States rates per day (RPD) have fallen on average by five percent YoY in Q1 of 2011, and are now back to rates seen in 2008. The decreased RPD can be attributed to the improving supply situation in the marketplace, as financing restrictions become less stringent for vendors. Additionally, larger companies have increased their fleets in anticipation of further industry consolidation.

Travel Management Trends

According to respondents of Egencia’s survey of nearly 350 travel buyers, 54 percent of buyers expect their travel volumes to increase during the remainder of 2011, with 17 percent planning to change their travel policies during the year. Additionally, 38 percent of travel buyers said they will negotiate more this year than they did in 2010.

Travel Managers universally identified cost control/reducing spend as the greatest challenge facing travel programs. Specific rankings of travel program challenges are as follows:

• Cost control/reducing expenses (79%)
• Traveler satisfaction (43%)
• Traveler compliance/policy enforcement (42%)
• Capturing a full view of travel spend (40%)

Further insights into Egencia’s 2011 Benchmarking study and Travel Manager survey are available upon request.

Research Methodology

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 2011. 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 were 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.© 2011 Egencia, LLC.  All rights reserved. CST # 2083922-50

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