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Egencia: 2012 Air and Hotel Prices Up

July 2, 2012 By: Newswire Travel Agent

Average ticket prices (ATPs) for air travel have, on average, increased in North America, Asia Pacific and Europe in the last year, attributed to rising jet fuel prices being passed onto travelers and tightly managed capacity discipline by airlines,  Egencia reports in its  2012 Global Corporate Travel Benchmarking Study and Travel Manager Research.

Travel managers surveyed universally identified cost control/reducing expenses (77 percent) as the greatest challenge facing their travel programs, followed by traveler compliance/policy enforcement (40 percent), Egencia reports.

Average daily rates (ADRs) for hotel stays have also increased in the majority of business destinations, continuing a reversal of previous trends, according to Egencia, an Expedia Inc. company. Improved occupancy and a decreasing amount of new hotel supply coming into the market has led to slightly higher room prices (approximately 6 percent in North America, 3.3 percent in Europe, and 5.7 percent in the Asia-Pacific region).

“The pricing landscape has made a noticeable – although less pronounced – shift from this time last year,” said Chris Vukelich, vice president, supplier relations, Egencia Americas. “We continue to see a return in demand for hotels 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 travel management companies to identify additional savings opportunities in hotel.”

Key results of the new benchmarking study:

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.

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 Eurozone, increased competition from low cost carriers, and increased competition with high speed rail.

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.

Car Rental Rates Per Day (RPD): In North America, rates per day (RPD) have fallen on average by a little over two percent YoY in Q1 of 2012. The decreased RPD can be attributed to the improving supply situation in the marketplace, as financing restrictions become less stringent for vendors.

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).

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

The full Egencia 2012 Corporate Travel Global Benchmarking Study and Travel Manager Research can be downloaded from

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By Newswire | July 2, 2012
62 percent of travel buyers say they will negotiate more in 2012 (compared to 38 percent in 2011).
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