2011 Global Travel Forecast UK 1

In This Guide
1. Air Fares Overview European ATP 2. Air Fares Overview North American ATP 3. Air Fares Overview Asia-Pacific ATP 4. Global Hotel Landscape 5. Supply Outlook: Hotel Negotiability 6. Lodging Trends 7. Car Rental Price Guidance (RFD) 8. Travel Management Trends 9. Research Methodology Pg. 1
2011 Global Corporate Travel Forecast and Hotel Negotiability Index

Companies continue to cautiously reinvest in corporate travel with an ongoing focus on cost control and efficiency; the current moderate rebound in corporate travel is likely to continue into 2011. Egencia predicts that many suppliers will implement price increases in 2011, coinciding with the increase in travel demand based on improving market conditions.
Based on Egencias 2011 Global Corporate Travel Forecast and Hotel Negotiability Index, average ticket prices (ATPs) for corporate travellers to top business travel destinations are expected to: Stay flat to slightly down in top European travel destinations; Stay largely flat to slightly up in key North American destinations; In Asia-Pacific , the ATP forecast for APAC points-of-sale is mixed, with prices increasing slightly in half the markets (including Sydney, Beijing and Mumbai) and flat or slightly down in others. Severely impacted by the economic climate of the last several years, the hotel environment is showing signs of strength relative to increased corporate demand, resulting in moderately improved hotel occupancy for nearly every top business market worldwide. In key destinations for 2011, Egencia forecasts average daily rate increases in North America, Europe, and AsiaPacific. In this guide, Egencia examines both the supply environment at a market-level for nearly 40 destinations in North America, Europe, and AsiaPacific, as well as the results of research from over 500 global travel buyers. In addition, we will share recommendations and best practices on how to manage your travel programs, anticipate travel industry changes, and optimize business results amidst the unique 2011 global supply landscape. Well also share the results of our unique Advance Purchase Advisory study, which identifies potential savings if organisations and travellers leverage Advance Purchase windows. The results are often quite dramatic.
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Air Fares Overview

European ATP Though European businesses are slowly increasing travel demand both domestically and internationally, air prices for corporate travel will remain flat to slightly down for flying to top business destinations with a few notable exceptions. Largest increase is forecasted for Glasgow (8%). For travel originating in the EU and ending in the United States, many destinations may see decreases including Los Angeles (down 12%), New York (down 3%), and San Francisco (down 1%). Prices are being driven downward by a number of factors including an increase in the number of low cost carriers, capacity additions that could outpace projected demand, and companies putting guidelines into place for travellers to book lower-class, lower-price cabins.
2011 Global Corporate Travel Forecast and Hotel Negotiability Index For more information, call 0207 065 5439 | www.Egencia.co.uk
2010 Egencia, LLC. All rights reserved. Expedia, Egencia, and the Egencia logo and Get Ahead are either registered trademarks or trademarks of Expedia, Inc. in the U.S. and/or other countries. Other logos or product and company names mentioned herein may be the property of their respective owners.
Advance Purchase Advisory Europe

Destination Amsterdam Barcelona Berlin Brussels Dublin Frankfurt Glasgow London Lyon Madrid Manchester Marseille Milan Moscow Munich Paris Stockholm Chicago Los Angeles New York San Francisco Long-Haul * Potential savings if tickets are purchased at least 21-30 days in advance of travel Potential Savings* 32% 23% 33% 34% 33% 36% 27% 32% 33% 32% 25% 35% 24% 20% 37% 32% 40% 14% 7% 12% 9%
Many major European destinations are forecasted to be flat to slightly down including London (flat), Munich (flat), and Berlin (down 5%).
North American ATP The current rebound in corporate travel demand is likely to continue into 2011. For 2011 vs. 2010, year over year, airfares for corporate travel will largely stay flat to slightly up for flights to top business destinations. Upward pricing pressures include the continued consolidation among airlines, particularly the merger of United Airlines and Continental. The largest increases are forecast in North American destinations such as Houston (up 7%), Phoenix (up 6%), and Denver (up 5%). Airfares for many North American destinations will remain flat or slightly down, including Washington DC (flat), Boston (flat), and New York (down 1%). However, maximum savings may be realised using Egencias Advance Purchase Advisory (see chart, page 3) a unique guidance tool that shows last-minute business travellers how much they can save if they book their tickets at least 21-30 days in advance.* Projected maximum savings in North American destinations include Toronto (46%), Montreal (45%), and Atlanta (22%).
Sources: Egencia analysis, based on data from OAG, STR, ARC and Expedia, Inc. *Egencia Advance Purchase Advisory savings are estimated based on average savingsrealised from 1Jan. 2009 to31 Jul.2010. The actual savings will vary due to seasonality, actualtravel time, and other factors affecting overall supply and demand in each particular market.
Increased savings for intra-European travel may be realised using Egencias Advance Purchase Advisory (see chart this page). Projected maximum savings in European destinations include Stockholm (40%), London (32%), and Paris (32%).
Sources: Egencia analysis, based on data from OAG, STR, ARC and Expedia, Inc.
ATP Forecast - European Origin

Destination Amsterdam Barcelona Berlin Brussels Dublin Frankfurt Glasgow London Lyon Madrid Manchester Marseille Milan Moscow Munich Paris Stockholm Chicago Los Angeles New York San Francisco Long-Haul ATP 2011 -1% -1% -5% 0% 2% -1% 8% 0% 0% -2% -1% 0% -1% 2% 0% 2% -2% 2% -12% -3% -1%
Advance Purchase Advisory North America

Destination Atlanta Boston Calgary Chicago Dallas Denver Houston Los Angeles Minneapolis Montreal New York Philadelphia Phoenix San Diego San Francisco Seattle Toronto Vancouver Washington DC London Paris Hong Kong Tokyo Long-Haul * Potential savings if tickets are purchased at least 21-30 days in advance of travel Potential Savings* 22% 3% 46% 14% 29% 26% 24% 10% 34% 45% 9% 31% 33% 27% 2% 18% 46% 31% 6% 48% 50% 32% 25%
ATP Forecast - North America Origin

Destination Atlanta Boston Calgary Chicago Dallas Denver Houston Los Angeles Minneapolis Montreal New York Philadelphia Phoenix San Diego San Francisco Seattle Toronto Vancouver Washington DC London Paris Hong Kong Tokyo Long-Haul ATP 2011 3% 0% 0% 1% 2% 5% 7% 2% 0% 1% -1% -1% 6% 4% 2% -2% 1% 2% 0% -3% -4% -5% -2%
Many North American destinations are forecasted to be flat to up: San Francisco (flat) and Los Angeles (up 3%).
Some markets are forecasted to show moderate decreases, due primarily to increased competition in the local markets as well as the downward pressure forged by domestic pricing wars in Australia. Melbourne is forecasted to show a decrease in ATP, down 11%. Other major APAC destinations are forecasted to show a slight decrease in price Delhi (down 5%) and Hong Kong (down 1%). However, maximum savings may be realised using Egencias Advance Purchase Advisory (see chart, page 4) a unique guidance tool that shows last-minute business travellers how much they can save if they book their tickets at least 21-30 days in advance. Projected maximum savings in Asia-Pacific destinations include Sydney (29%), Shanghai (28%), and Beijing (25%).
ATP Forecast - Asia-Pacific Origin

Destination ATP 2011 3% -5% -1% -1 1% 2% 9% 8% 2% 7% 2% 3% -1% 1% 0% Long-Haul Beijing Delhi Hong Kong Melbourne Mumbai Shanghai Singapore Sydney Tokyo London Los Angeles New York
Asia-Pacific ATP Unlike 2010, where the Asia-Pacific air pricing landscape fluctuated greatly on a market-bymarket basis, 2011 should see more price stability across the board. ATPs for APAC origin or pointsof-sale are likely to increase slightly in half of the destinations we analysed and remain flat or slightly down in others. The pronounced economic recovery in China and India, as well as increased demand across all major destinations, is helping to place upward pressure on prices. Largest increases are forecasted for Shanghai (up 9%), Singapore (up 8%) and Tokyo (up 7%).
Paris San Francisco
Advance Purchase Advisory Asia-Pacific

Destination Beijing Delhi Hong Kong Melbourne Mumbai Shanghai Singapore Sydney Tokyo London Los Angeles New York Paris San Francisco Long-Haul * Potential savings if tickets are purchased at least 21-30 days in advance of travel Potential Savings* 25% 10% 16% 20% 14% 28% 15% 29% 22% 32% 17% 30% 30% 19%
Considerations for travel buyers: Educate your travellers on the value of being flexible. By opting to leave slightly earlier or later or to make one stop versus a direct flight, travellers can find additional savings on air ticket prices. Book early. In an era of constrained capacity and rising ticket prices in many markets, booking in advance remains even more critical. In 2010 and into 2011, airlines are expected to place tougher restrictions on lower price categories, meaning that travellers need to book farther in advance to secure less expensive flights. While not every trip is planned early, encourage your travellers to book as early as possible to get their choice of route options and lower ticket prices. By doing so, travellers can save up to 50 percent on ticket prices, according to Egencias Advance Purchase Advisory. Consider reminding travellers of the advantages of Advance Purchase during the booking process, especially in the preferred self-booking platform. These can include a dynamic message within the booking platform, encouraging travellers to book early and secure less expensive tickets. Take advantage of increased competition where possible. Certain global markets and routes are experiencing pricing battles between established and/or low-cost carriers. This can represent an opportunity for savings, but organisations should be cognisant of ticket restrictions from many low-cost carriers while ensuring they are comparing total prices, which include ancillary fees, when shopping for tickets.
Keep a close eye on class of service policy. In general, prices for First & Business class tickets grew at a similar pace to the Economy class tickets in 2010, as airlines took a measured approach to attract their most valuable clientele. Next year, however, we predict the price for the top of the cabin will outpace that of Economy class. In light of that, we recommend travel managers drive their class of service policy and specify class based on the duration of the trip.
Streamline pre-trip approval processes. Because of constrained capacity and fare accessibility, its important that organisations respond quickly and efficiently to passenger requests. By responding in a timely fashion to trip approval requests, companies can ensure that their travellers can book and confirm lower priced tickets.
Monitor airlines ancillary revenue. Nearly every airline continues the practice of adding baggage fees, reservation change fees, and miscellaneous operating revenue (pet transportation, standby passenger fees). Travellers should ensure they research the total cost of a trip with a particular carrier when comparison shopping.
Airlines may be more agreeable to negotiating discounts if bookings are consolidated, supported by strong policy tools and backed by reporting and historical data. Airline partners will want a concrete demonstration that travel buyers have implemented strong policy controls to increase share and target incentive goals, allowing corporations to shift business to preferred partners. While buyers should ask for increased discounts for consolidated share, current trends have created an environment where
ADR Forecast
Europe Amsterdam Barcelona Berlin Brussels Dublin Frankfurt Glasgow London Lyon Madrid Manchester Marseille Milan Moscow Munich Paris Stockholm North America Atlanta Boston Calgary Chicago Dallas Denver Houston Los Angeles Minneapolis Montreal New York Philadelphia Phoenix San Diego San Francisco Seattle Toronto Vancouver Washington DC APAC Beijing Delhi Hong Kong Melbourne Mumbai Shanghai Singapore Sydney Tokyo ADR 2011 3% 5% 4% 3% 1% 2% 7% 1% 0% 1% 1% 0% 3% -7% 2% 2% 3% ADR 2011 1% 5% -1% 3% 1% 0% -3% 4% 6% 5% 2% 4% -3% 0% 4% 8% 2% -5% 6% ADR 2011 4% 4% 3% 3% -2% 5% 1% 4% 0%
airlines are less willing to expand existing discounts without expanded share. In addition to fares, consider negotiating airline amenities and perks, such as waived baggage fees, status matches, cabin upgrades, and soft-dollar funds. Companies with international business may want to seek lane fares and/or flat fares, which allow for a better discount than standard percentage discounts. The Continental-United merger continues to make headlines. However, this partnership is not likely to take effect until late 2011. In the interim, it may be best to secure the benefits of the expansion by negotiating a preferred partnership with one carrier now. Summary If a company can bring incremental revenue opportunities to a carrier, increased discounts are possible, though 2011, like 2010, will most likely be a challenging year. For successful negotiations, travel managers must have a good understanding of their travel spend, use strong policy tools, and have historical data in place to manage their travel program. While not all classes of service will receive discounts, travel managers should look to other areas to find value, such as waived fees, upgrades and status matches.
Global Hotel Landscape

In general, average daily rates (ADRs) are forecast to be up overall in North America, Europe and Asia-Pacific. Corporate demand appears to be rebounding, along with improved occupancy in almost every top business market worldwide and a decreasing amount of new hotel supply available. In addition, the predicted increase in air capacity will bring more travellers, potentially adding to the increase in hotel rates. Many European cities are predicted to show improvement year over year, 2011 vs. 2010, with Glasgow (up 7%) leading the way, followed by Barcelona (up 5%). The exception is Moscow, as Egencia predicts its ADR to fall 7% in 2011 versus 2010. Egencia forecasts that the largest ADR increases in the U.S. will be in Seattle (up 8%), Boston (up 5%) and Minneapolis (up 6%). Asia-Pacific will most likely follow the trends of North America and Europe, with ADRs slightly up overall year on year; Shanghai (up 5%), Sydney (up 4%) and Beijing (up 4%). In essence, the predicted figures are mostly up by a few percentage points, except for three destinations. For example, with Houston, air capacity is forecasted to decline in 2011, so there will be fewer travellers, not more. Consequently, ADRs are unlikely to increase. Furthermore, in New York, the potential of adding 5-6 percent capacity in 2011 will likely have a moderating affect on ADRs, resulting in mere 2 percent increase year on year.
Supply Outlook Hotel Negotiability

Egencias Hotel Negotiability Index, an indicator of the overall supply landscape in top domestic cities, suggest that 2011 will be a sellers market for hotels. The majority of major European business destinations will maintain weak to moderate negotiability, with the exception of Lyon, Marseille, and Moscow.
Weak Moderate Strong
Stockholm Glasgow Manchester Dublin Amsterdam Berlin Frankfurt Munich Milan
Moscow
London
Brussels Paris Lyon
Marseille Barcelona Madrid
Europe
The majority of major North American business destinations also will maintain weak to moderate negotiability, with the exception of Houston and Calgary.
Vancouver Seattle
Calgary Montreal

San Diego San Francisco Los Angeles Phoenix
Minneapolis Chicago Denver
Toronto
Boston New York Philadelphia Washington DC
Atlanta
Dallas Houston
North America
The Asia-Pacific region will most likely be the weakest of the three regions, with a large majority of major APAC destinations maintaining a weak negotiability indication. The exception is Melbourne and Mumbai, both moderate in the Hotel Negotiability Index.
Tokyo Beijing Delhi

Shanghai Hong Kong
Mumbai
Singapore
Sydney Melbourne
Asia-Pacific Lodging Trends

Now is the right time to establish or update a preferred supplier strategy, which can be achieved through the following tactics: Strict policy management and support of negotiated rates. By demonstrating a consistent effort to drive share towards preferred suppliers, corporate travel buyers have a stronger place at the bargaining table. Mandating bookings via an agency of record will also aid in this discussion. Monitoring creates visibility and can help a travel manager stay ahead of out-ofpolicy practices. Accessible travel program data can help companies negotiate better rates and volume discounts, by providing greater clarity of: Travellers who routinely overspend Underutilisation of specific hotels Top cities for the travel program Analyse total hotel spend in each market and on a regional basis. A common best practice is to consolidate one hotel for every 500 room-nights or US $10,000 at a particular property. Negotiate based on property level. Although the overall negotiability is relatively weak in 2011, it is important to look at potential differences by property level. According to the STR Hotel Pipeline Outlook for the US in July 2010, the share of upscale and midscale properties recently opened by hotel chains accounts for 70 percent of all new rooms. A similar picture remains among the properties currently under construction,
Todays Business Travel Landscape

Question: Over the last six months, has your company changed its amount of business travel?
which is in contrast to the existing market supply where the share of aforementioned properties is only 40 percent. Certainly, conditions will vary from market to market, but the data indicates that negotiations will be somewhat easier for 3 to 4 star properties, rather than the upperscale, 4+ star range. Companies should consider departmentspecific restrictions as a way to control
Negotiate for better terms and conditions. Favourable cancellation terms or decreased early check-out fees can add up to significant savings.
Negotiate last-room availability clauses. This means that properties must offer negotiated rates even if only one room type is available, resulting in lower ADRs throughout the year.
Europe
34% 30% 12% 6% 17%
Regularly upgrade room category pricing. The ADR ceiling or cap in large metropolitan markets can be tight due to city wide sellouts, which are more common in these business hubs.
costs. By segmenting traveller groups, organisations can still provide a solid level of service and amenities while decreasing costs. Be strategic. For example, consider tieringdown within the same hotel chain. Travellers will still earn rewards and receive the right amenities -- all while potentially saving money. Leverage hotels that offer free or discounted amenities. Cost avoidance is a key strategy for 2011. Encouraging travellers to book at and leverage hotels with free amenities such as Internet service, shuttle service, breakfast, and hosted evening events can result in big cost savings. Property-specific agreements typically lead to better savings. While chainwide agreements provide the advantage of a regional discount to companies with geographically dispersed travel patterns, property-level agreements at individual chain properties offer greater discounts. Chainwide agreements are also very difficult to negotiate for organisations without significant travel spend. Consider independent hotels. Without the need to subsidise costly loyalty programs, these properties may offer better rates and amenities.
Work with your travel management company to take advantage of powerful discounts and perks. In many cases, travel management companies can consolidate the buying power of a broad range of clients and offer benefits that companies may not be able to achieve on their own. For example, many hotels on Egencia feature business traveller friendly preferred rates, which are highly competitive and frequently include free amenities such as same-day cancellation, Wi-Fi, etc.
North America
22% 28% 31% 8% 11%
Signicantly Increased Slightly Increased Has Not Changed Slightly Reduced Signicantly Reduced
Summary Now is the time to work with your hotel partners. Companies that can show incremental demand may be able to negotiate favourable agreements. However, many hotel rates are already at rock-bottom prices so it will be challenging to negotiate further discounts. There still remains an opportunity to negotiate for amenities that are meaningful to your travellers as well as favourable conditions such as early check-out.
Source: Survey of over 200 Egencia European clients, conducted August 2010 | Survey of over 300 Egencia North America clients, conducted August 2010

Question: Are you planning to increase or decrease your travel budget in 2011?
Car Rental Price Guidance (RPD)

Due to restored financing conditions, Egencia expects a slight increase in car rental prices. Also, US car manufacturers are forecasted to be in a better economic position in 2011, meaning that rock bottom prices for inventory may be a thing of the past. Europe Egencia predicts that car suppliers will maintain their fleets at current levels into 2011 which, coupled with the increased demand, could mean increased RPDs by about 5% year over year. United States In the U.S., rates decreased through the first
Prepare data that allows a company to negotiate additional cost savings. Insurance, drop-off fees, and surcharges are all areas that deserve additional focus. Buyers should also compare fees across vendors and use the data in negotiations. Larger companies may be able to negotiate a refueling cap for when travellers do not refuel off-site.
Europe
13% 7% 28% 52%
Leverage multiple data sources. Typically, expense systems only provide the amount spent and the location, but will not provide all the details needed for negotiations with vendors.
Summary Driving policy enforcement and mandating car rental bookings will allow corporate accounts to realise savings through compliance and by negotiating better preferred vendor agreements.
North America
18% 43% 4%
Increase Reduce Remain the Same Dont Know
half of 2010 by 5% compared to the year prior. In 2011, however, Egencia anticipates industry consolidation and tighter inventory management will push the RPDs up 3 percent year over year. Increases in surcharges at on-airport rental locations, particularly in CHI, PHL and LAS, are also being seen. Canada Egencia anticipates rates will stay slightly down year over year, well into 2011. Considerations for the travel buyer Even with the improved economic environment, car companies will demand value from accounts in exchange for discounts. If companies cannot meet their revenue commitment, discounts will be reduced. But if a company can bring additional business to the table, the buyer is in a very good position to negotiate. Keep a close eye on future prices. With the recent Hertz acquisition of Advantage and a potential bidding war for Dollar/Thrifty, this could mean decreased competition in the US car rental market, which usually results in higher prices.
34%

Question: Have you dramatically changed how/when you evaluate or renegotiate your travel program over last year?
Travel Management Trends

Egencia surveyed more than 500 travel buyers in North America and Europe regarding cost control measures, travel spend and expectations for 2011. According to survey respondents, 42 percent of North American buyers and 23 percent of European buyers have slightly or significantly increased travel over the last six months, compared with a slight increase of only 3 percent a year ago in October/November 2009. The top strategies for maintaining or controlling travel costs in North America and Europe include: Advanced booking of airline tickets (56 percent North America, 53 percent Europe) Enforcing policy more rigorously (47 percent North America, 40 percent Europe) Actively tracking unused tickets (43 percent North America, 9 percent Europe) Requiring pre-trip approval (42 percent North America, 49 percent Europe) Encouraging the use of web conferencing (33 percent North America, 38 percent Europe)
Research Methodology
Data and insight based on the statistical analysis of the past and present industry trends, macroeconomic factors,market research andvendors capacity forecasts for 2011. Smith Travel Research (STR) and OAGfilings were leveragedfor a market-level analysis of both Lodging and Air capacity. ARC, STR and Egencia Internal Data were used for market-level analysis of pricing.
Europe
33% 13% 28% 14% 12%
North America
26% 24% 8% 15% 27%
Yes, were making changes more frequently Yes, were making changes less frequently No, but well make changes next year No, and we dont have any plans to do so I dont know
Source: Survey of nearly 500 Egencia clients, conducted August 2010 | Survey of over 100 Egencia clients, conducted October 2009
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In This Guide

2011 Global Corporate Travel Forecast and Hotel Negotiability Index

Air Fares Overview

Advance Purchase Advisory Europe

ATP Forecast - European Origin

Advance Purchase Advisory North America

ATP Forecast - North America Origin

ATP Forecast - Asia-Pacific Origin

Paris San Francisco

Advance Purchase Advisory Asia-Pacific

Global Hotel Landscape

Supply Outlook Hotel Negotiability

Weak Moderate Strong

Stockholm Glasgow Manchester Dublin Amsterdam Berlin Frankfurt Munich Milan

Brussels Paris Lyon

Marseille Barcelona Madrid

Weak Moderate Strong

Minneapolis Chicago Denver

Boston New York Philadelphia Washington DC

Tokyo Beijing Delhi

Shanghai Hong Kong

Asia-Pacific Lodging Trends

Todays Business Travel Landscape

Todays Business Travel Landscape

Car Rental Price Guidance (RPD)

Todays Business Travel Landscape

Travel Management Trends

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