Expedia’s wholly-owned travel management company Egencia has detected an improvement in the overall business travel environment in the first three months of the year.
“Corporate travellers 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,” said Noah Tratt, vice president, supplier relations, Egencia Americas.
Compared with the first three months of 2009, the biggest hike in prices for North American business travellers is on routes to London, which are 25% more expensive in dollar terms. Tokyo is the only destination which has dropped in price.
For European point of sales, the picture is less clear, with Egencia detecting some downward pressure on pricing as a result of the presence of low cost carriers in the market and reduced load factors. Prices from Europe to London are 5% down on the first quarter of 2009.
Hotel average daily rates (ADRs) are even lower this quarter than last year, Egencia says. While business travel may be on the up, corporations are still looking for the best possible deals on their hotel rates.
Demand from the meetings and events market remains weak, while overcapacity on a number of key markets is distorting supply. However, hotel ADRs were up in London by 4%, 5% in Berlin, Paris by 2% and Munich by 2%.
Egencia also quizzed more than 400 travel buyers from North America and Europe. 56% of North American buyers and 45% of Europeans expect travel volumes to increase during the rest of the year, with 20%and 15% respectively planning to change their travel policies during the year.
Cost control and reducing expenses are the top priority for buyers this year, the study confirmed.
Read the 2010 Corporate Travel Global Benchmarking Study online