2009 Business Travel Forecast From Travelleaders Otg

2010 Business Travel Forecast For more information, please call: 800-807-8018

Business Travel – Yields 5:1 ROI - New NBTA Study Says In a recent study commissioned by the National Business Travelers Association (NBTA), and executed by IHS Global, indicates that business travel does indeed contributes to sales and increased profits. Sizeable Returns on Investment: An average incremental return on investment of 5:1; or for every dollar spent, the average company would realize a $15 increase in incremental profit resulting from increased sales.* New Net Sales of $810 Billion: Industry-wide movement to optimal travel expenditures levels could yield $810 billion in new net sales. Massive financial effect on the U.S. Economy: Increasing travel expenditures to optimal levels would create 5.1 million new jobs and generate more than $101 billion in tax revenue. *Returns on Investment Vary by Industry: These returns vary across each of the 15 industry segments investigated by the study. 2010 Business Travel Forecast Worldview Corporate Travel Services 800-807-8018

2010 Cost increase Projection: Primary T&E Segments Source: Internal Travel Data 2010 Forecast Estimates 2010 Business Travel Forecast Worldview Corporate Travel Services 800-807-8018 Industry Segment Range of Increases 2-4% Airfare Hotel 4-8% 7% Increase (Domestic) 4-6% Decrease (International) Car Rental 6-7% Meals

Airline deals continue to be less lucrative in the classes of services used most often by business travelers. Additional fees will increase the cost of travel through the many ubiquitous ancillary fees that are being implemented across the industry. Domestic airfares will continue to increase in 2010 across all fare categories by 7% as airlines continue to tweak capacity and better manage their yields. As the economy improves additional costs pressure will be brought to bear by increased fuel expenses. YTD Data Provided By Topaz International 2010 Business Travel Forecast Airlines 2010 Forecast 2010 Business Travel Forecast Worldview Corporate Travel Services 800-807-8018

Airlines continue to deal with the current downturn in demand by removing inventory from route systems and “right-sizing” aircraft in certain markets to keep airplanes full. Premium fare revenue will continue to be soft into 2010 . Ancillary revenue will help to replace premium fares paid by business travelers. Although International flights are down 4%-6% year over year, airlines are still willing to reward companies who shift international share with domestic incentives. 2010 Business Travel Forecast Airlines – The View For 2010 2010 Business Travel Forecast Worldview Corporate Travel Services 800-807-8018

Enroll in appropriate corporate programs (ask your TMC for support in this area).

Audit expense reports.

Manage revenue versus lift numbers to improve fare and lift balances.

Put policy verbiage in place to address incremental fees.

Tighten advance purchase policies.

Consolidate preferred vendors and review potential airline programs.

2010 Business Travel Forecast What Companies Can Do To Mitigate These Increases: 2010 Business Travel Forecast Worldview Corporate Travel Services 800-807-8018

Implement approval/ pre-approval processes for travel expenditures.

Use ROI calculations to justify travel.

Actively track unused tickets.

Reduce the number of employees attending conferences.

When possible book meetings around airfare not the time.

Improve demand management practices.

Travel Management Agencies Continue to Find Lower Fares Since 2001 A recent study by Topaz International confirms the benefit of using a professional full service travel agency. Full service agencies found lower fares 91.56% of the time versus their online counterparts. 2010 Business Travel Forecast 2010 Business Travel Forecast Worldview Corporate Travel Services 800-807-8018

Booking In Advance Generates Substantial Savings Topaz International evaluated over 900 city pairs to determine if purchasing in advance yielded lower priced airfares for typical business trips. The results, both domestic and international are charted below. 2010 Business Travel Forecast 2010 Business Travel Forecast Worldview Corporate Travel Services 800-807-8018

As with other sectors of the industry, car rental companies continue to grapple with sluggish sales and significant decreases in rental days and ancillary revenue (GPS, EZ-Pass etc. Car rental companies are reducing fleet size and keeping vehicles in inventory considerably longer than in years past. 2010 should See an increase in negotiated rates ranging from 2%-4%. Increases in surcharges are likely as municipalities and airports look to replace lost revenues without tapping local tax bases. Average daily domestic total costs including taxes, concession fees and insurance, should increase to $68 per day for midsized rentals. 2009 Data Provided By Runzheimer 2010 Business Travel Forecast Car Rental 2010 Business Travel Forecast Worldview Corporate Travel Services 800-807-8018

Only rent full size vehicles when three or more employees / guests are using the

vehicle.

Strengthen travel policies for ancillary fees including GPS rental, EZ Pass usage,

fuel policies, insurance etc.

Put your car rental out to bid. The industry is very price competitive currently.

Strive to reduce costs by eliminating or reducing city surcharges, one-day/one-way

rentals, insurance terms, length of agreement, weekly rates etc.

Renegotiate to achieve front end incentives and soft dollar benefits. Back-end

incentives are difficult targets to reach and provide minimal

revenue opportunities in general.

Conduct meetings at airport properties to eliminate rental fees.

Hotels will see a slight increase in occupancy in most domestic and international markets in 2010. Average daily rate (ADR) and revenue per available room (RevPAR) metrics will see declines through the third quarter of 2010 . We are predicting a 2% overall increase in occupancy while ADR should contract by 4% as hoteliers compete for customers. New construction and reduced meetings spend have also contributed to this trend. Hotels continue to offer additional amenities including free internet, breakfast and free parking in their base rates to lure business travelers to their doors . Business travelers will also benefit by more liberal loyalty reward programs through the middle of 2010. 2010 Business Travel Forecast Hotels 2010 Business Travel Forecast Worldview Corporate Travel Services 800-807-8018

Many companies are taking advantage of this buyers market by renegotiating room rates at their highest volume properties several times this year. Travel buyers should take a cautious approach in this area. When supply tightens and demand increases hotels will be less reluctant to work with companies that pressed too hard in current negotiations. Hotels 2010 Business Travel Forecast Worldview Corporate Travel Services 800-807-8018

Develop a segmented policy Instead of a per-diem policy.

Negotiate hotel programs in the summer months.

Use hotel RFP software for cities with over 100 room nights annually.

Negotiate one primary & one secondary hotel per primary city location.

Consolidate spend.

Consider six month performance agreements for reluctant properties.

Pre-negotiate new locations.

Ask that most add-on costs be included in the rate.

Opportunity Areas 2010 Business Travel Forecast 2010 Business Travel Forecast Worldview Corporate Travel Services 800-807-8018

Procurement’s Influence on Travel Buying Patterns Percent of companies where procurement influenced travel policies in recent years *Source: BTN 2010 Business Travel Forecast 2010 Business Travel Forecast Worldview Corporate Travel Services 800-807-8018

Percent of companies where procurement made policy more restrictive *Source: BTN 2010 Business Travel Forecast 2010 Business Travel Forecast Worldview Corporate Travel Services 800-807-8018

Companies continue to employ a variety of mechanisms to manage traveler

behavior from E-mail communications and mandates to business unit report

cards.

In a recent BTN poll over 71% of respondents said their companies

have rolled out some form of pre-trip notification or approval requirement.

How Companies Communicate With Travelers

Regular policy communications via e-mail, intranet, etc. 75%

Online communications/red flags in booking 69%

Online communications/red flags in reimbursement 64%

Mandates 60%

Travel counselor verbal warning 56%

Business unit comparative report cards 41%

Sharing savings with traveler 31%

Incentive programs 27%

Other 15%

2010 Business Travel Forecast Managing Traveler Behavior 2010 Business Travel Forecast Worldview Corporate Travel Services 800-807-8018

Budgetary restrictions 66%

Advance purchase (air travel) 52%

Travel reduction (# of trips) 51%

Restrict number of meeting attendees 47%

Restrict number of meetings 42%

Use of non-refundable tickets 37%

Lower class of hotel, car rental 30%

Use low cost carriers 27%

* Statistics include multiple answers 2010 Business Travel Forecast How Companies Are Controlling Travel Spend 2010 Business Travel Forecast Worldview Corporate Travel Services 800-807-8018

For more information on Corporate Travel Management, please call Tracy Newton at 800-807-8018. [email_address] 2010 Business Travel Forecast Leading Companies of all sizes Are Controlling Travel Spend 2010 Business Travel Forecast Worldview Corporate Travel Services 800-807-8018