Biz travel costs to remain flat next year
Average ticket prices for top corporate destinations will remain flat or slightly up on average, according to a new Egencia report.
“After a year of significant flexibility, Egencia’s Hotel Negotiability Index suggests that corporations will face a more challenging negotiating environment in 2011,” the report found.
The study evaluated global industry trends, macroeconomic factors, in-depth research of supplier markets and capacity across air, hotel and car rental channels in both domestic and international destinations, along with booking window analysis tailored for business travellers.
"Corporations are travelling again this year, though still below 2008 levels," said Rob Greyber, President of Egencia. "Egencia clients – large and small – remain focused on cost containment and cost avoidance but through tools such as policy compliance, rather than the broad cuts we saw last year. We expect the modest spending rebound to continue, but careful, policy-driven governance will still be a theme in 2011."
Pricing for corporate travel ATPs in top European business travel destinations is expected to stay flat to slightly down, year-over-year, with the exceptions of Paris and Moscow, which may see a small rebound. An increase in low cost carriers, capacity additions and demand for lower-class cabins will contribute to downward pressure.
“In addition, organizations will see weak to moderate hotel negotiability in these business hubs,” the report found.
The current rebound in corporate travel demand will continue into 2011, pushing corporate travel prices upward. Adding to upward pressure is consolidation in the airline industry among United and Continental, and new transatlantic alliances.
By David Wilkening
David
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