Mumbai presents greatest potential for corporate air travel, hotel cost savings in 2011

GURGAON - The world’s fifth largest travel management company, Egencia, has said that India’s commercial capital Mumbai and the Australian city of Melbourne, offer the greatest potential for savings on corporate air travel and hotel bookings in 2011, and also predicted that average ticket prices (ATPs) for top corporate travel destinations would also be slightly up in North America, Europe and Asia-Pacific regions.

According to its 2011 Corporate Travel Forecast and Annual Hotel Negotiability Index (HNI) forecast, which is an Advance Purchase Advisory that identifies ideal advance booking windows and potential savings for flight purchase in nearly 40 markets around the world, the HNI suggests that corporations will face a more challenging negotiating environment in 2011.

Melbourne and Mumbai have been cited as ideal travel destinations due to excess supply, while the other cities provide a challenge for rate negotiations.

Egencia’s Director for India, Gaurav Sundaram, said: “Air capacity is expected to moderate in 2011 as the domestic airlines reduce their highly aggressive price wars, organisations should see greater stability and consistency in corporate travel.”

Sundaram added: “Mumbai presents the greatest potential for cost savings to our travellers with the only decrease to be seen in ADRs in APAC, in addition to a high negotiability index for organisations.”

According to the release, the outlook for corporate travel ATPs is mixed for Asia Pacific destinations, with prices staying flat or slightly down across several cities like Hong Kong and Melbourne. Tokyo, Singapore and Shanghai will likely see ATPs increase slightly. Egencia also anticipates a rise in ADRs for this region, most dramatically in Shanghai, Sydney, Delhi and Beijing.

Unlike 2010, where the Asia Pacific air pricing landscape fluctuated greatly on a market-by-market basis, 2011 should see more price stability across the board, the Egencia, a unit of Expedia, Incorporated, said in its release.

ATPs for corporate travellers to the APAC region are likely to increase slightly in half of the destinations 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 air ticket prices for corporate travellers.

To arrive at these findings, the Egencia 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 travelers.

“Corporations are traveling again this year, though still below 2008 levels,” a company press release quoted its president, Rob Greyber, as saying.

“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,” Greyber added.

The markets, which are forecasted to show moderate decreases are primarily due to increased competition in the local markets as well as the downward pressure forged by domestic pricing wars in Australia.

Overall, average daily rates for corporate travellers are expected to be slightly up across key cities. With very little new supply coming into the market in the short term, there is improved occupancy in most top business markets resulting in upward pricing pressure.

“The general trend across Asia Pacific is a slight increase in air and hotel prices as a direct result of the speedy recovery of the APAC economy,” said Cecilia Routledge, Managing Director, Egencia, Asia-Pacific.

Routledge added: “Next year, organisations can expect a more challenging negotiating environment with their preferred hotel partners. As a result, our customers are turning to us to assist in managing and monitoring the rising cost associated with corporate travel.”

Egencia’s exclusive Advance Purchase Advisory (APA) informs travel managers and corporate travellers of the best booking timeframe and possible savings for advance air ticket purchases.

The advisory shows that business travellers should book three to four weeks (21-30 days) in advance to realize maximum savings.

Egencia’s Hotel Negotiability Index, an indicator of the overall supply landscape in top APAC cities, suggests that 2011 will be a challenging year for corporate negotiations with preferred supply partners.

Compared to 2009, rates are hardening across the region with limited flexibility.

The global Egencia study surveyed more than 500 global travel buyers regarding cost control measures, travel spend and expectations for 2011.

According to survey respondents, one third of buyers have slightly or significantly increased travel over the last six months, compared with a slight increase of only three percent a year ago in October/November 2009.

The current rebound in corporate travel demand will continue into 2011, pushing corporate travel prices upward, the release said. (ANI)