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 America, Asia 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.

Know Your Markets! Summer 2012 – What Lies Ahead?

According to the Travelhorizons™ quarterly report by MMGY Global and the US Travel Association, the outlook for summer travel continues to brighten for the second consecutive year,  with more than three in five US adults (64 %), or an estimated 154 million Americans, planning on taking at least one trip for leisure purposes during the next 6 months. The percentage of Americans planning to travel between May and October is up from 61 (%) last April and 56 (%) in April 2010.

The results are based on a survey of 2,200 US adults taken in April 2012. “The April travelhorizons results come as welcome news for destinations and travel companies ahead of the summer and fall travel seasons,” said Roger Dow, President and CEO of the US Travel Association.

Business travel is expected to improve slightly in the next six months, compared to the same timeframe as last year, with 17% of US adults planning at least one business trip between May and October, a typically slow period for such travel. An encouraging sign that general business activity in the US is on the mend is that business travelers took an average of 6.3 trips in the past 12 months, the highest average number in the past 5 years.

The overall Traveler Sentiment Index™ (TSI), which tracks Americans’ evolving attitudes toward travel, reached 93.5 in April, nearly 10 points higher than April 2011 (March 2007=100). It was also significant that April’s TSI remained essentially unchanged from the level of 93.6 in February, bucking the concern and speculation that higher gasoline prices earlier in 2012 would depress travel sentiment, as it did in 2011.

An other survey, Expedia’s 2012 Flip Flop Report, examines summer vacation behavior and preferences across 5 continents.

Among other findings, Expedia’s Flip Flop Report revealed that the beach is by far the favorite destination for the majority of the world’s travelers. The average beach holiday is just about one week in length, at 7.7 days. Combined with results from Expedia’s Vacation Deprivation® study,  in the US, Americans spend a full 40% of their allotted vacation days at the beach. In fact, when Americans were asked to choose between spending time at the beach and spending time with family, the beach won handily.

Main Findings:

Despite the carefree nature of a sun-drenched week at the beach, beachgoers worldwide remain cost-conscious. In the US, the most important factor for 78% of beachgoers is the total trip price. The beach itself matters too – total vacation price and beach quality are the #1 and #2 criteria for travelers in 14 of the 21 countries surveyed – but the cost of the visit is the top consideration.

The Popularity of the Beach is Unsurpassed

More than half (52%) of respondents plan to holiday at the beach in the next 12 months, compared to 45% who said they took a beach vacation the year prior. And while the average stay for a beach vacation is 7.7 days, this is less true of Koreans, Japanese and Singaporeans, who seem more likely to prefer beach weekends to extended stays.

For Most Beachgoers, the Most Popular Activity is No Activity At All

Relaxing and sunbathing were among the top two activities for beachgoers across all five continents. The Irish, at 75%, were the most likely to relax, while Mexicans (79%) seem to be happiest with lying in the sun. Brazilians (40%) were likeliest to exercise on the beach; when doing so, they may well stumble over the Japanese, who were 14 times likelier to relax (28%) than exercise (2%).

Germans are Likeliest to Sunbathe Nude

Germans displayed the most permissive attitudes towards nude sunbathing. A full 15% of German respondents indicated that they sunbathed naked. Indians and Spaniards (8%) were the second-likeliest to shed their clothing, while the French (5% clothing-free) were more aligned with Americans (2%), the British (2%) and the Japanese (1%). Perhaps unsurprisingly, Germans seem to be the most popular beachgoers: when asked if they’d spent beach days with strangers, the Germans (23%) and Brazilians (19%) were likeliest to say they had.

The Flip Flop Survey was conducted online by Harris Interactive on behalf of Expedia.com from February 14 – March 21, 2012 among 8,599 adults, 18 and older, in the following countries: the United States (501), Canada (1,249), Mexico (400), Argentina (312), Brazil (308), United Kingdom (402), Germany (423), France (414), Italy (437), Spain (418), Norway (300), Sweden (300), Denmark (300), Ireland (300), Netherlands (300), Japan (429), India (438), South Korea (346), Singapore (321), Australia (400), and New Zealand (301).

Full Surveys Details: Expedia FLip Flop Report, Travelhorizons™ quarterly report

International Online Travel Report

The trend to book travel online will naturally continue in 2012 – especially in emerging economies such as China, India and Brazil. In line with this trend the share of the online segment compared to the total travel market is expected to increase to almost one third worldwide, according to the latest “Global Online Travel Report 2012” by yStats.com.

However, in 2011 the value of the US online travel market was still higher than that of Great Britain, China, India and Brazil combined. and in 2012, the “Online Travel Segment” is forecast to represent almost a third of the total global travel market value. The UK is projected to remain the largest share of Europe’s online travel market in 2013, followed by Germany and France. Gross bookings on the Asia Pacific online leisure/ unmanaged business travel market are expected to increase by more than +30% in 2012 compared to 2010. More specifically:

Online travel arrangements continue to gain in popularity across the entire American continent

Compared to 2011, revenue generated in the US online travel market is forecasted to grow in 2012 by a low double digit percentage figure. Clients who bought travel products online in 2011 made most purchases through online travel agents amounting to almost 50%, followed by search engines and websites of tour operators. In the category mobile bookings, hotels were booked most frequently, followed by flights and travel packages.

In Canada, in early March 2012 Expedia was the leading travel website: it generated twice as much traffic as the second placed website Flight Network. In Argentina particularly younger people tend to book travel arrangements online; however, internet use in this area is growing across all age groups.

Online travel sector is especially successful in Europe

In Europe the total number of bookings through online travel agencies increased by almost 20 % from 2010 to 2011. In Great Britain, more than half of all consumers avoid traditional travel agents altogether and book their holidays online instead. In Germany, in 2011 customers preferred travel agents for more expensive travel arrangements and online booking for cheaper tours. In this sector online revenue has grown considerably, while offline revenue has decreased. In France revenue generated with online travel bookings grew between January and September 2011 more than the total B2C E-Commerce revenue. Additionally, in 2011, B2C E-Commerce revenue in the category “Travel and Holiday Accommodation” was higher than in the next four categories combined. Almost half of all Italian online customers booked their accommodation online in 2011, making this the strongest category within Italian B2C E-Commerce. In Russia almost 50% of all passengers had purchased their flight on a travel website, while nearly one quarter had booked tickets via phone.

Growth potential in large parts of the Asia-Pacific region

Although growth in the category online hotel bookings is expected to slow down in the Asia-Pacific region between 2010 and 2012, it still exhibits double digit figures. In Japan the share of online travel bookings – in line with the soaring trend – surpassed for the first time 50% in 2010. Unique visitor numbers for travel websites were evenly distributed across all age groups in Japan, while the group of individuals older than 55 was slightly in the lead in the first quarter of 2011. In China in 2011, only 14% of all internet users had ever visited a travel website, but online travel bookings are expected to become more popular there too. The Indian online travel market is also estimated to grow by almost 30% in 2012. The data for Australia is outstanding: the category “Travel, Accommodation, Memberships or Tickets of any Kind” was the most popular online product category in June 2011.

Online travel market in the Middle East is catching up

Spurred by the introduction of online payment options, the online travel market in the Middle East is expected to grow considerably compared to 2011. Growth is predicted for the share of online travel bookings in relation to total revenue generated with travel tickets until 2015, compared to 2010 figures.

Source: www.ystats.com, Photo source: travel.roche.com

eTourism Seminars- Practical Tools for Tourism Professionals

abouTourism in cooperation with E-Tourism Frontiers, are glad to present the new series of eTourism seminars to take place in two significant tourism destinations in Greece.  Our next stations are:

Thessaloniki on the 26^th & 27^th of April 2012

In cooperation with the Municipality of Thessaloniki and the support of Halkidiki Hotel Association and the Helexpo Exhibition Centre

Rhodes on the 8^th & 9^th of May 2012

With the support of the Chamber of Dodecanese

Considering the fast technological developments affecting the travel and tourism industry and through our close cooperation with the industry, these seminars are organized in order to fill the gap, so that  tourism businesses and organizations can practically select and implement new technologies and media in their business, effectively applying new knowledge and skills.

The  eTourism training seminars are especially organized for tourism organizations, companies and professionals in order to help them build and develop their online tourism knowledge and capacity. The seminars offer solid, interactive and easy to grasp training in the fundamentals of  etourism, provided by expert trainers and presenting appropriate, locally available solutions.

Through a two full day program, featuring some of the world’s leading online tourism experts, including representatives from TripAdvisor, Expedia & Google Travel, participants take advantage of very practical training and interactive presentations on online tourism sales, marketing and management including sessions on digital marketing, travel distribution and sales, social networking and media.

Also, for the first time, the program will include a web clinic option, where the participants will have the opportunity to get their website reviewed and tested to see whether their business website is working effectively and how to improve it. A detailed analytical report on the website complete with recommendations for improvement and change will also be supplied.

In combination with the presentation of selected locally available solutions, the local tourism industry acquires easy to use and ready to implement knowledge to their business in order to effectively compete in the marketplace.

Are you Interested? Check out more information, analytical program and registration details here!

Know Your Markets – Multinational Vacation Habits Revealed

Expedia just released its Vacation Deprivation Study, an annual analysis of vacation habits across multiple countries and continents. The 2011 study spans North America, Europe, Asia, South America and Australia. It reveals who gets – and takes – the most vacation time, as well as attitudes toward vacation. Common themes impacting how and where respondents vacation include money, romance and disapproving bosses.

Key findings include:

Europeans lead the world in vacationing. On the whole, European workers enjoy considerably more vacation time, as measured by days given and days taken, than their peers elsewhere. The average employed European earns 25-30 vacation days in a given year, and, with some exceptions, tends to use them all. Brazilians treat vacation as the Europeans do – as a vital part of being employed, rather than a luxury. The study showed that Brazilian workers receive 30 vacation days and enjoy every one of them.

Americans treat vacation as a luxury rather than a fact of life. Americans receive roughly half the Europeans’ allotment of vacation time. In 2011, employed Americans earned 14 vacation days and took 12, a decrease from 2010. The median number of vacation days US workers earned in 2010 was 15 days; the number taken was 12. In comparison, the French earned 30 vacation days, and took all 30 in 2011. In 2010, the average French worker used all but one of their vacation days.

American vacation habits are more like Asians’ than Europeans’. Asia represents the most vacation-deprived region in the 2011 Vacation Deprivation study. Japanese workers trailed the field, taking a mere five vacation days out of 11 available, while South Korean respondents enjoyed seven out of a possible ten days of vacation. Last year, Japanese workers left six vacation days on the table, trailing only the Italians. Italian respondents reported that they left seven vacation days unused in the past year, more than any other nation, though Italians are not precisely vacation-deprived, having 28 days at their disposal.

Money and planning are the most commonly-cited reasons for not taking vacation. Overall, 22% of respondents said they believed they could not afford it, and 20% said “lack of planning.” The US leads the world in money worries: 1 out of 3 Americans say that they can’t afford vacation. However, almost 50% of US workers describe their financial situation as “solid” or “good,” which reinforces the notion that Americans view vacation as a luxury. Brazilian respondents, on the other hand, were least likely to see money as a vacation impediment (6%). Brazilians chose “lack of planning” as their top reason.

The world’s least supportive bosses work in Italy and South Korea. Most workers reported that their bosses are largely supportive of vacation – Americans find that 73% of their bosses are supportive. The reverse was true in Italy (56% boss disapproval) and South Korea (52%), where respondents were most likely to believe management frowns on employee vacations or were unsure. Work/life balance seems to be most prevalent in northern Europe, with Norway and Sweden boasting the highest boss-approval percentages (88% and 82%, respectively.)

Most vacationers find it difficult to disconnect from work. The Danish find it easiest – only one in seven respondents from Denmark report that they check email and voicemail regularly while on break, with more than 50% refusing to check in even once. Americans, too, prefer to disconnect when on vacation, with only 25% checking in regularly, and 75% checking in sometimes or never. More than 50% of French, Japanese, Indian and Italian workers remain tightly connected to the office while on vacation.

Most people prefer beaches over romance. Globally, beach vacations are king. Twice as many respondents cited beach vacations as their preference, versus “romantic holidays with spouse” – except in South Korea, which overwhelmingly chose “romantic holidays” (45% versus 27% favoring the beach). Romance was the preferred option for the Japanese as well, unlike Argentineans and Mexicans, who were four or five times as likely to select the beach as they were to choose a romantic holiday, a city getaway or an outdoor adventure. The Dutch were the outdoorsiest vacationers, while Singaporeans prefer the city.

Source: www.expedia.com, www.ftnnews.com

Check out other recent Market Research Studies: 

Market Knowledge: Different Destination Information Sources per Age Group

Now Trending: Travel Expenditure and Holiday Planning on the Rise! Are you Ready?

Top Factors Influencing Destination Choice