Egencia, an Expedia, Inc. company, unveiled its 2010 Corporate Travel Global Benchmarking Study, evaluating the current business travel landscape and corresponding 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 research and capacity implications in Q1 2010.

The study validates themes uncovered in Egencia's 2010 Forecast and Hotel Negotiability Index, including that the hotel market for corporate travel has experienced significant decreases in Q1. In addition, Egencia also surveyed more than 400 travel buyers in North America and Europe regarding travel program expectations, policies and challenges.

"We're seeing a different pricing picture compared to this time last year," said Noah Tratt, Vice President, Supplier Relations, Egencia Americas. "Corporate travelers are returning to the air and road, but companies are still seeking to control spend.  Given the increased discipline of airlines in reducing capacity, we believe the biggest cost savings opportunity for corporations is found with hotels."

Average Ticket Prices (ATPs)
North America
As a result of the economic downturn and resulting decrease in travel in 2009, airlines have maintained capacity discipline into 2010. With increased demand for business travel in Q1 2010, this has resulted in an increase in average ticket prices. Higher fuel surcharges, reduced competition on many routes and the dramatic slowing of route expansion has also resulted in upward pressure on ticket prices for major business destinations in North America.

Europe
European airlines are also maintaining their capacity discipline in 2010. Though European businesses are slowly increasing travel demand both domestically and internationally, this tighter control of capacity has resulted in an increase in ATPs for several business destinations, though the picture is not as clear-cut as North America. Conversely, prices are being driven downward by a number of factors including perceived economic vulnerability of Euro-zone. Increased competition from a number of low-cost carriers and decreased passenger load factors have also resulted in downward pricing pressure for corporate travel.

APAC
Asia-Pacific represents a truly heterogeneous air pricing landscape, varying on a market-by-market basis. Driving the pricing increases is greater demand for business travel into China and India and the strength of the dollar, which has resulted in higher fuel costs for many APAC carriers. Many markets also showed substantial decreases, especially in Australia where the competition for domestic routes heated up between JetStar and Virgin Atlantic, as well as Tiger Airways.  Many Asia-Pacific carriers have maintained or increased capacity in contrast to their European and North American counterparts, resulting in decreased prices. 

Hotel Average Daily Rates (ADRs)
In the first quarter of 2010, hotel average daily rates dropped in major business destinations.  Contributing to this, the meetings and incentives business has yet to fully recover and the recent influx of supply coming on the market over the last several years has resulted in an overabundance of hotel capacity in many cities.  While corporate demand has begun to rebound, higher average ticket prices and lower air capacity brings less business travelers, resulting in decreasing hotel rates. With improved occupancy and a decreasing amount of new hotel supply coming into the market, hotel prices in select European and Asia-Pacific markets were actually flat to up. 

Car Rental
For the North American car rental industry, restricted financing and subsequently constrained supply made 2009 an unusual year. Q1 2010 rates per day (RPDs) have fallen 10 percent YoY, however, they are still above 2008 levels. The robust used car market and unwillingness of healthier car manufacturers to provide cheap inventory is also adding upward pricing pressure. On the other hand rising ATPs squeezing traveler budgets, which along with improved financing conditions and profitability of car rental vendors in Q1, are contributing to downward pricing pressure.

Travel Management Trends
According to respondents of Egencia's survey of more than 400 travel buyers in North America and Europe, 56 percent of North American buyers and 45 percent of European buyers expect their travel volumes to increase during the remainder of 2010, with 20 percent (North America) and 15 percent (Europe) planning to change their travel policies during the year. Additionally, 40 percent of North American travel buyers and 49 percent of European travel buyers said they will negotiate more this year than they did in 2009.

"We found that in North America, 36 percent of travel buyers are evaluating supplier contracts more frequently due to the economic climate," said Tratt. "Following the themes from our research, the largest opportunities for cost savings this year are through better program management and a stronger hotel program."

Travel Managers universally identified cost control/reducing spending as the greatest challenge facing travel programs. Specific rankings of travel program challenges are as follows:
- Cost control/reducing expenses (59% Europe, 49% North America) 
- Traveler satisfaction (11% Europe, 23% North America) 
- Traveler compliance/policy enforcement (12% Europe, 13% North America)
- Capturing a full view of travel spend (9% Europe, 7% North America).