Egencia, an Expedia, Inc. company, 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 rail inventory. Focusing on top domestic and international business destinations in Europe, North America and Asia-Pacific, Egencia analysed…
Egencia, an Expedia, Inc. company, 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 rail inventory. Focusing on top domestic and international business destinations in Europe, North America and Asia-Pacific, Egencia analysed 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 industry landscape, and that they have the right tools to optimise their business travel programmes 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 train pricing in today’s market, with tips on how to navigate successfully through a constantly evolving business travel environment."
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, 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 airline load
factors have slightly increased, with suppliers carefully managing capacity.
– 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, ATPs for intra-APAC destinations increased 3% YoY.
– The hotel environment worldwide experienced an Average Daily Rates (ADRs)
increase in the majority of destinations. ADRs increased an average of 3.3% in Europe,
6% in North America, and 5.7% in Asia-Pacific.
"From our end, we can see 2 trends: on the one hand, companies keep slowly investing in business travel; on the other hand, air and hotel pricing environment is increasing. But opportunities for savings can still be found and the TMC has an important role to play", said Germain Huber, Vice President, Supplier Relations & Consulting, Egencia EMEA. "With this in mind, Egencia developed integrated solutions to its booking website. To name a few: The Air Fare benchmarking tool helps our clients take the right decision on air tickets depending on the average price. Egencia Hotel helps monitor and control hotel spend while bringing satisfaction to bookers/travellers."
Average Ticket Prices (ATPs)
Europe
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.
The chart below illustrates Q1YoY ATP figures in top business destinations for European points of sale.
| ATP Change | ||
| European POS | YoY | 2012 Q1 ATP |
| Amsterdam | 15.2% | GBP199 |
| Barcelona | 13.5% | GBP162 |
| Berlin | 7.5% | GBP164 |
| Brussels | 5.2% | GBP251 |
| Dublin | 8.1% | GBP194 |
| Frankfurt | 4.9% | GBP218 |
| Glasgow | 4.9% | GBP164 |
| London | 6.3% | GBP186 |
| Lyon | 4.1% | GBP211 |
| Madrid | 4.2% | GBP184 |
| Manchester | 5% | GBP188 |
| Marseille | -1.4% | GBP192 |
| Milan | -0.8% | GBP191 |
| Moscow | -0.1% | GBP353 |
| Munich | -1.1% | GBP201 |
| Paris | -9.7% | GBP176 |
| Stockholm | -12.4% | GBP236 |
| TOTAL Change | 5.8% | GBP191 |
| Chicago** | -11% | GBP371 |
| Los Angeles** | -16% | GBP420 |
| New York** | -4% | GBP355 |
| San Francisco** | -4% | GBP477 |
| **ARC data for trans-Atlantic flights (European origin) | ||
**ARC data for trans-Atlantic flights (European origin)
North America
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.
APAC
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.
Europe
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.
The chart below illustrates Q1 YoY ADR figures in selected business travel destinations for European points of sale.
| ADR Change | ||
| Europe | YoY | 2012 Q1 ADR |
| Amsterdam | 2.6% | GBP93 |
| Barcelona | 2.3% | GBP84 |
| Berlin | -1.5% | GBP69 |
| Brussels | 1% | GBP91 |
| Dublin | 6.5% | GBP68 |
| Frankfurt | -3.9% | GBP102 |
| Glasgow | 1.7% | GBP58 |
| London | 2.8% | GBP116 |
| Lyon | -1.8% | GBP72 |
| Madrid | -2.1% | GBP68 |
| Manchester | -1.7% | GBP63 |
| Marseille | 6.3% | GBP68 |
| Milan | 2.0% | GBP100 |
| Moscow | 5.1% | GBP138 |
| Munich | -1.1% | GBP85 |
| Paris | 5.5% | GBP117 |
| Stockholm | 9.2% | GBP103 |
| TOTAL Change | 3.3% | GBP93 |
North America
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.
APAC
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.
Europe Rail Pricing
For some intra-Europe trip durations, Egencia recommends that your travellers shift from air to high speed rail to save time and money. Sample pricing for popular routes and savings over air travel are listed below (Q1 2012 pricing).
| Route | Station | Roundtrip Price | Comparative Roundtrip Airfare |
| Paris to Lyon | Lyon Part Dieu to Paris gare Lyon | GBP109 | GBP167 |
| Lyon Perrache to Paris Gare Lyon | GBP108 | GBP167 | |
| Paris to London | Paris Nord to St. Pancras Int. | GBP259 | GBP217 |
| London St. Pancras to Gare Du Nord | GBP227 | GBP217 | |
| London to Manchester | London Euston to Manchester Picc | GBP83 | GBP130 |
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 programmes, 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.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
