Egencia®, an Expedia, Inc. company, today 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, Europe and Asia-Pacific. After a year of decreased negotiability in 2011, Egencia's Hotel Negotiability Index suggests that corporations will continue to face a weak to moderate negotiating environment in 2012. Additionally, Egencia surveyed more than 250 travel buyers in North America and Europe regarding cost control measures, travel spend, technology trends and overall expectations for 2012.

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

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

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

"With the continued, albeit slow, rise of travel demand, increased ATPs and ADRs, reduced overall capacity, and fragile economic outlook, companies are placing an increased focus on mitigating costs and increasing efficiencies when possible," said Mark Hollyhead, Senior Vice President, Egencia Americas. "With this in mind, we are taking every measure to ensure our clients are well informed and leveraging the right tools and technologies to optimize their travel programs and attain maximum cost control."

North America Outlook

"Corporate travel experienced moderate growth in 2011 as companies continued to cautiously reinvest in their travel programs," said Chris Vukelich, Vice President Supplier Relations, Egencia Americas. "Accordingly, suppliers will likely implement moderate price increases in 2012, with the potential for significant increases if fuel costs spike – this will create a challenging climate for buyer negotiations. For this reason, it is increasingly beneficial for companies to leverage the negotiating power of their TMCs to incur the best deals."

ATPs

The current rebound in corporate travel demand will likely continue into 2012, pushing corporate travel prices upward. Pricing pressures include an expected ~1.8% GDP growth, increased oil prices that are expected to remain steady through 2012, fears of continued economic difficulties, and airlines continuing to tightly manage capacity.

Advance Purchase Advisory

Egencia's Advance Purchase Advisory informs travel managers and corporate travelers of the best booking timeframe and possible savings for advance air ticket purchases. The advisory shows that, for the majority of destinations, business travelers should book 22 days or more in advance to realize maximum savings. Booking in advance to Toronto, for example, can save as much as 28 percent compared to last-minute bookings. Additional destinations where the 22 day window nets significant savings are Montreal (26%), Dallas (24%), Minneapolis (24%) and Calgary (23%).

ADRs

In general, average daily rates (ADRs) are forecast to be up overall in North America, with the largest increases in San Francisco (up 15%), Boston (up 10%) and Minneapolis (up 9%). Upward pricing pressure can be attributed to the trend that new supply growth in the U.S. and Canada remains slow while demand has been making a recovery toward 2008/09 levels.

Supply Outlook: Hotel Negotiability

Egencia's Hotel Negotiability Index, an indicator of the overall supply landscape in top North American cities, suggests that 2012 will continue to be a seller's market for hotels, although not as widespread as 2011. The cities with the greatest opportunities for negotiations are Washington D.C., Calgary and Houston; while San Francisco, Boston and Minneapolis will have weak negotiability.

Charts below illustrate projected year-over-year 2012 vs. 2011 ADR and negotiability projections in the local currency in selected business travel destinations around the world for North American points of sale.

Travel Management Trends

Egencia surveyed more than 250 travel buyers in North America and Europe regarding cost control measures, travel spend, technology trends and expectations for 2012. According to survey respondents, 42 percent of North American buyers (percentage is flat year-over-year) and 43 percent of European buyers (versus 23 percent last year) have slightly or significantly increased travel over the last six months, signaling a continued rise in overall travel demand.

The top strategies for maintaining or controlling travel costs in North America include:

  • Advanced booking of airline tickets (50% )
  • Requiring pre-trip approval (26%)
  • Enforcing policy more rigorously (40%)
  • Encouraging the use of web conferencing (28%)

Mobile

Mobile devices are becoming increasingly important to today's travel managers, with 86 percent of North American 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%)

Social Media

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

Traveler Duty of Care

Over half (52 percent) of European respondents cited they have a formal traveler duty of care program (security program) in place for their travelers, compared to only 38 percent in North America.

Europe Outlook

ATPs

European businesses are slowly increasing travel demand both domestically and internationally; air prices for corporate travel will remain slightly up for flights to top business destinations with a few notable exceptions, including Marseille, Paris, Frankfurt, and Milan.

ADRs

In general, average daily rates (ADRs) are forecast to be slightly up overall in Europe, with the largest increases in Moscow (up 9%) and Stockholm (up 8%) leading the way. Other cities are showing flat to slight ADR growth, including Berlin (flat), and Paris (up 2%).

APAC Outlook

ATPs

ATPs for APAC are likely to increase in almost every destination we analyzed, signifying growth for the region. Some markets are forecasted to show only slight increases, due primarily to the rising costs of oil and increased taxes.

For more details, you can download the full 2012 Corporate Travel Forecast and Hotel Negotiability Index, including considerations for travel buyers here:

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.

Disclaimer

This data refers to business destinations and business travel pricing. These projections are based on Egencia analysis of data from OAG, ARC, STR and Expedia, Inc. The forecast represents an opinion based on current market factors and is not a representation or warranty as to the accuracy of the forecasts or projections made herein. Actual changes in ticket prices and hotel rates could vary significantly from forecasted numbers, impacted by unforeseen future economic and political factors.

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 .

Egencia and the Egencia logo are either registered trademarks or trademarks of Expedia, Inc. in the U.S. and/or other countries. All other trademarks are the property of their respective owners.© 2011 Egencia, LLC. All rights reserved. CST # 2083922-50

Sonia Reid
+1-425-679-7801
Egencia, LLC

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