Corporate Travel Landscape – Trends & Challenges

An evaluation of the current business travel landscape and supply environment for air, hotel and rail inventory through the 2012 Global Corporate Travel Benchmarking Study and Travel Manager Research by Egencia, released this month.

Focusing on top domestic and international business destinations in Europe, North America and Asia-Pacific, Egencia analyses industry trends, supplier data and capacity implications in Q1 2012. Additionally, it surveyed over 300 travel buyers globally identifying current trends and challenges.

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.

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).

Average ticket prices (ATPs) for air travel have, on average, increased in North AmericaAsia Pacific and Europe in the last year, attributed to rising jet fuel prices being passed onto travelers and tightly managed capacity discipline by airlines.

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.

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).

Find the Full Study here.

Climate Change & Air Travel: a Paradox of Our Age

vapourtrail460Climate change is a serious threat to the ecosystems that humans rely upon, and air travel appears to be the fastest-growing contributor to the problem.

For example, just one return flight from London to New York produces a greater carbon footprint than a whole year’s personal allowance needed to keep the climate safe. In the same course, Research by Friends of the Earth found that carbon dioxide generated by a single, round-trip London to Miami flight was equal to one year of automobile driving by the average British motorist. In order to keep the climate safe we need drastic cuts in air travel. Efficiency savings such as more direct flights shave off small fractions but are dwarfed by planned growth. More specific, aviation currently contributes about 3 percent of global carbon emissions, but air travel is growing at some 5 percent a year, meaning numbers of air passenger kilometers will triple by 2030. Furthermore, Boeing estimates that aircraft numbers will double to more than 30,000 in little more than a decade.
Reducing air travel seems to be one of those untouchable subjects, perhaps more so than asking people to give up their cars & use public transportation, but research clearly shows the environmental damage caused by aircraft should motivate us to eliminate, or at the very least curtail, air travel.
On the other hand, travel & tourism industry is heavily based on the air travel as people want, or feel, they need to fly in order to visit family or friends, vacation overseas, or attend conferences or conventions. It is the most affordable and fastest mode of transportation, however there is no denying it is a major contributor to environmental pollution.
However, not much has been done about emissions from air transportation. Countries with national emissions targets under the Kyoto Protocol, like Canada, are only required to account for emissions from domestic flights. Emissions from international flights are not counted. And very little has been done to actually limit these emissions. To date the only formal plan to control and reduce international aviation emissions is being developed within the European Union (EU).
Many studies show that important initiatives for reducing the impact of air travel to the environment could be taken such as promoting rail transport for domestic travel or developing alternative fuels.
con-trailsA British study group dubbed Omega (Opportunities for Meeting the Environmental Challenge of Growth in Aviation) is looking at a range of technological and other factors, including aircraft design, sustainable fuels, and open rotor-propelled aircraft that reduce fuel burn, to assess how they could mitigate aircraft pollution.
Boeing last month unveiled the 787 Dreamliner, which it says will use 20 percent less fuel than similar-sized aircraft. The UN International Panel on Climate Change says perennial improvements have made planes 70 percent more efficient than they were 40 years ago. Another 40-50 percent improvement can be expected over the next 30 years.
The problem, climate experts say, is that current projections indicate that air travel is set to grow 400 percent in the same time and In reality, the small, incremental gains that we can reasonably expect in aircraft fuel efficiency will be eclipsed by the projected growth in the industry.
Finally, there seems to be a fundamental contradiction in promoting tourism and combating greenhouse emissions. After all, tourism’s growth is largely dependent upon air travel, which causes the majority of tourism-related pollution. The recent ETC-UNWTO joint conference for the climate change addressed the issue and showed that the industry is beginning to take climate change seriously and opened avenues of dialogue and interaction.

After all, our lifestyles, economies, health and social-being are all affected by climate change, and although the consequences of climate chanhe will vary on regional basis, all nations and economic sectors will have to contend with the challenges of climate change through adaption and mitigation. Tourism is no exception and in decades ahead, climate change will become an increasingly pivotal issues affecting tourism development and management at all levels, tasks and procedures.

REFERENCES

Climate Change and Tourism

Climate Change AirportWatch

Air travel latest target in climate change fight

Climate change to drive radical changes in global tourism

Air Travel and Climate Change – David Suzuki Foundation

Air Travel’s Impact on Climate Change