05 November 2009

Sydney, Singapore hotels to perform better than most

SYDNEY - Travel management company Egencia predicts that the cost of air travel to top business destinations will increase globally for corporate travellers next year.

EgenciaÃ¢â¬â¢s 2010 Corporate Travel Forecast and Hotel Negotiability Index, indicates that average ticket prices (ATPs) will increase by up to four per cent for air travel in the Asia Pacific region.

The study also looks at accommodation costs and predicts that hotel prices in Asia Pacific will generally remain flat in 2010.

Released annually by Egencia, an Expedia Inc company, the index looks at city-specific data to help business decision-makers gauge travel programme opportunities while planning.

This yearÃ¢â¬â¢s index analyses corporationsÃ¢â¬â¢ buying power in nearly 40 global cities.

Corporate travel ATPs are expected to rise just slightly for Asia-Pacific markets due to increased demand outstripping supply.

Unlike most global markets, the Asia-Pacific region has already seen increases in air traffic over last year during the month of September, the first positive move in many months.

However, the continued battle for market share between domestic carriers and the entrance of V Australia and Delta to trans-Pacific routes are likely to temper rising ATPs in the Australian market.

Despite anticipated growth in business travel, there are likely to be fewer business travellers compared to capacity in some markets, which will mean lower to flat ADRs for hotels.

Most notably in China and India, excess capacity built up over recent years will provide value to businesses. Key exceptions to this are Sydney and Singapore, which may see a small rebound in pricing.

Ken Pfaffman, EgenciaÃ¢â¬â¢s Australia manager, said ADR in Beijing was tipped to fall eight percent, the result of a capacity overhang from the Beijing Olympics and the global financial crisis.

Ã¢â¬ÅâœThere is still excess capacity in the market and there are still pricing opportunities to get people into hotels,Ã¢â¬~ he said.

Sydney was a very different scenario, he said, because occupancy rates this year had been relatively stable compared to other markets, and there had not been much new supply coming into the market.

Pfaffman also thought Singapore would absorb the arrival of thousands of new hotel rooms at the two integrated resorts due to open in 2010.

EgenciaÃ¢â¬â¢s Hotel Negotiability Index, an indicator of the overall supply landscape in top Asia-Pacific cities, suggests that 2010 will remain a buyerÃ¢â¬â¢s market for corporations during at least the first two quarters.

The majority of major business destinations will maintain high negotiability, with the exception of Melbourne and Sydney.