2009 Business Travel Forecast For Business Travel Services please call:   800-807-8018
Industry in General Source: Travel Leaders Estimates 2009 Cost increase Projection: Primary T&E Segments Industry Segment ...
General Information Source: ACTE 64% Of Companies Will Reduce Or Maintain  Current Travel Spending Levels In 2009 2009 Bus...
Airline Industry     2009 Airfare Forecast & Industry Projections Domestic   International Travel Leaders +5% to  8% +3% t...
Source: Runzheimer / * Estimated Rates - Travel Leaders   Airline Industry   US Domestic Airfare: Average Price Quarterly ...
Source: Runzheimer / * Estimated Rates - Travel Leaders   Airline Industry   International Airfare: Average Price Quarterl...
Airline Industry  <ul><li>Other Statistics </li></ul><ul><li>Average Domestic Trip Will Increase to $1,002 </li></ul><ul><...
<ul><li>Ala Carte Pricing </li></ul><ul><li>Customers are being charged for 1 st  & 2 nd  bag fees, reservation support, c...
Our View <ul><li>With decreases in seat capacity from 10% to 13% in recent months, </li></ul><ul><li>US domestic carriers ...
Our View <ul><li>Regional jets and reduced seat capacity will drive prices higher as </li></ul><ul><li>consumers compete f...
<ul><li>Put Policy Verbiage In Place To Address  Incremental Fees </li></ul><ul><li>Control Renegade Spend To Increase Neg...
<ul><li>Negotiated Rates Should Increase 3% To 4% In 2009 </li></ul><ul><li>Increases In Surcharges & Taxes As Cities & Ai...
Source: Runzheimer / Travel Leaders Car Rental Quarterly Average  Car Rental Pricing Shows Decrease  in 2009! 2009 US Car ...
Our Recommendations <ul><li>Renegotiate Your Current Contract /Go Out To Bid </li></ul><ul><li>Change Policy To One Lower ...
Car Rental Negotiations <ul><li>Liability Insurance </li></ul><ul><li>LDW Deductible (If Not Self Insured) </li></ul><ul><...
Hotels Source: Runzheimer / Travel Leaders Hotel Pricing Reflects a 6% increase for 2009 2009 US Hotel Pricing  For Busine...
Hotels Source: Smith Travel Research / PKF Hospitality Research <ul><li>2009 Average Occupancy Rate  58.3% </li></ul><ul><...
Hotels Source: Smith Travel Research / PKF Hospitality Research <ul><li>5% Drop In Occupancy </li></ul><ul><li>Rate Increa...
Our Recommendations <ul><li>Stay In Suburban Locations When Possible </li></ul><ul><li>Develop A Segment Policy Instead Of...
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2010 Business Travel Forecast

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2010 Business Travel Forecast

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2010 Business Travel Forecast

  1. 1. 2009 Business Travel Forecast For Business Travel Services please call: 800-807-8018
  2. 2. Industry in General Source: Travel Leaders Estimates 2009 Cost increase Projection: Primary T&E Segments Industry Segment Range of Increases 1-3% Airfare Hotel 4-8% 5-8% Car Rental 8% Meals For Business Travel Services please call: 800-807-8018
  3. 3. General Information Source: ACTE 64% Of Companies Will Reduce Or Maintain Current Travel Spending Levels In 2009 2009 Business Travel Activity Adjustments For Business Travel Services please call: 800-807-8018
  4. 4. Airline Industry 2009 Airfare Forecast & Industry Projections Domestic International Travel Leaders +5% to 8% +3% to 5% NBTA +7% to10% AMEX -3% to 5% +1% to 6% Advito +6% to 8% Egencia -4% to 17% (depending on country) Purchasing.com -5% to +5% The Beat +6% to 8% For Business Travel Services please call: 800-807-8018
  5. 5. Source: Runzheimer / * Estimated Rates - Travel Leaders Airline Industry US Domestic Airfare: Average Price Quarterly Average US Domestic Airfare Shows steady increase in 2009 For Business Travel Services please call: 800-807-8018
  6. 6. Source: Runzheimer / * Estimated Rates - Travel Leaders Airline Industry International Airfare: Average Price Quarterly Average International Airfare Shows steady increase in 2009 For Business Travel Services please call: 800-807-8018
  7. 7. Airline Industry <ul><li>Other Statistics </li></ul><ul><li>Average Domestic Trip Will Increase to $1,002 </li></ul><ul><li>Average International Trip Will Increase to $3,452 </li></ul><ul><li>Overall Business Travel Will Decline 2.7% </li></ul><ul><li>Small Meetings (70% Of All Meetings) Will Remain Flat </li></ul>Source: USA Today / ACTE / AMEX For Business Travel Services please call: 800-807-8018
  8. 8. <ul><li>Ala Carte Pricing </li></ul><ul><li>Customers are being charged for 1 st & 2 nd bag fees, reservation support, curb-side </li></ul><ul><li>check-in, beverages, meals, select seating, internet services, pillows and blankets. </li></ul><ul><li>53% of Travelers Prefer Unbundled Pricing </li></ul><ul><li>28% of Travelers Would Pay More For Better Service </li></ul><ul><li>United Airlines Forecasts $700 Million In Ancillary Revenue For 2009 </li></ul><ul><li>Northwest Airlines Forecasts $600 Million In Ancillary Fees In 2009 </li></ul><ul><li>Overall Ancillary Revenue for 2007 Was $1.7 Billion </li></ul><ul><li>Ancillary Fees Add Between 5% - 15% of Base Fares </li></ul>Airline Industry Source: NBTA / USA Today For Business Travel Services please call: 800-807-8018
  9. 9. Our View <ul><li>With decreases in seat capacity from 10% to 13% in recent months, </li></ul><ul><li>US domestic carriers have right sized their inventories to accommodate </li></ul><ul><li>a slowing economy. Although fuel costs have decreased recently, </li></ul><ul><li>airlines will not be passing these savings on to customers. </li></ul>How inventory and flight capacity affects your bottom line Major carriers will tweak remaining inventories to accommodate modest rate increases by altering aircraft size and seat mix to generate increased revenue. For Business Travel Services please call: 800-807-8018
  10. 10. Our View <ul><li>Regional jets and reduced seat capacity will drive prices higher as </li></ul><ul><li>consumers compete for fewer seats. </li></ul><ul><li>Airline discounts programs will be tougher for companies to negotiate as </li></ul><ul><li>higher yields reduce the need for airlines to discount inventories. </li></ul><ul><li>Additional ancillary revenue will increase the actual cost of air travel. </li></ul>How inventory and flight capacity affects your bottom line For Business Travel Services please call: 800-807-8018
  11. 11. <ul><li>Put Policy Verbiage In Place To Address Incremental Fees </li></ul><ul><li>Control Renegade Spend To Increase Negotiating Leverage </li></ul><ul><li>Combine Meeting Spend With Day-To-Day Travel Expenditures </li></ul><ul><li>Create A Stand Alone Policy For Meetings And Events </li></ul><ul><li>Tighten Advance Purchase Policies </li></ul><ul><li>Tighten Exception Policies – Increase Penalties </li></ul><ul><li>Consolidate Preferred Vendors </li></ul><ul><li>Audit Expense Reports </li></ul><ul><li>Provide Budget Owners With The Data They Need To Control Travel </li></ul><ul><li>Spend In Their Sphere Of Influence </li></ul><ul><li>Implement Approval/ Pre-Approval Processes For Travel Expenditures </li></ul><ul><li>Use ROI Calculations To Justify Expenses </li></ul><ul><li>Actively Track Unused Tickets </li></ul><ul><li>Reduce Number of Employees Attending Conferences </li></ul>Our Recommendations 2009 Recommended Cost Containment Strategies For Business Travel Services please call: 800-807-8018
  12. 12. <ul><li>Negotiated Rates Should Increase 3% To 4% In 2009 </li></ul><ul><li>Increases In Surcharges & Taxes As Cities & Airports Try To Recoup Tax </li></ul><ul><li>Revenue Losses Are Possible </li></ul><ul><li>Car Rental Companies Will Reduce Fleets To Meet Lower Demand and </li></ul><ul><li>Will Retain Vehicles Longer In Their Fleets </li></ul><ul><li>Companies Will Increase Car Rental Spending As They Move </li></ul><ul><li>Employees Away From More Expensive Personal Car Usage </li></ul><ul><li>Average Domestic Cost Per Day Including Gas, Insurance, Taxes, </li></ul><ul><li>Concession Fees And Insurance Will Increase To $68 Per Day (compact/ midsize) </li></ul>Car Rental Source: The Beat / Travel Leaders For Business Travel Services please call: 800-807-8018
  13. 13. Source: Runzheimer / Travel Leaders Car Rental Quarterly Average Car Rental Pricing Shows Decrease in 2009! 2009 US Car Rental Pricing For Business Travel Services please call: 800-807-8018
  14. 14. Our Recommendations <ul><li>Renegotiate Your Current Contract /Go Out To Bid </li></ul><ul><li>Change Policy To One Lower Class Of Service – </li></ul><ul><ul><li>Car Rental Companies Typically Don’t Carry Many Compact Cars As They Are Less Profitable Thus Insuring More Frequent Upgrades </li></ul></ul><ul><li>Strengthen Ancillary Cost Policies </li></ul><ul><ul><li>GPS Rental, EZ Pass Usage, Fuel Policies, Insurance, Etc.. </li></ul></ul><ul><li>Encourage Public Transportation, Ride Sharing & Taxi Cab Usage </li></ul><ul><li>Conduct Internal Meetings At Airport Properties To Eliminate Costs </li></ul>2009 US Car Rental Pricing Strategies For Business Travel Services please call: 800-807-8018
  15. 15. Car Rental Negotiations <ul><li>Liability Insurance </li></ul><ul><li>LDW Deductible (If Not Self Insured) </li></ul><ul><li>LOA Terms </li></ul><ul><li>Age Limits </li></ul><ul><li>Frequent Renter Club Enhancements </li></ul><ul><li>GPS Rentals </li></ul><ul><li>VIP Services </li></ul><ul><li>HQ Pricing </li></ul><ul><li>Additional Day Charge </li></ul><ul><li>Weekly Rental Charges </li></ul><ul><li>One-Way Rentals </li></ul><ul><li>Additional Mileage Charges </li></ul><ul><li>Mid-Week Rental Charges </li></ul><ul><li>Back-End Rebates </li></ul>2009 US Car Rental Pricing Considerations For Business Travel Services please call: 800-807-8018
  16. 16. Hotels Source: Runzheimer / Travel Leaders Hotel Pricing Reflects a 6% increase for 2009 2009 US Hotel Pricing For Business Travel Services please call: 800-807-8018
  17. 17. Hotels Source: Smith Travel Research / PKF Hospitality Research <ul><li>2009 Average Occupancy Rate 58.3% </li></ul><ul><li>REVPAR Down -4.3% to -7.9% </li></ul><ul><li>1.5% Decline In Demand </li></ul><ul><li>3% Increase In Inventory </li></ul>2009 Hotel Supply & Demand For Business Travel Services please call: 800-807-8018
  18. 18. Hotels Source: Smith Travel Research / PKF Hospitality Research <ul><li>5% Drop In Occupancy </li></ul><ul><li>Rate Increases In Top US Markets (MIA,NYC,DFW,ORD,DCA,LAX) </li></ul><ul><li>Overall Rate Increases Of 4% to 8% Nationally </li></ul><ul><li>Secondary & Tertiary Markets Will See Rate Reductions of 2% </li></ul>2009 Hotel Supply & Demand For Business Travel Services please call: 800-807-8018
  19. 19. Our Recommendations <ul><li>Stay In Suburban Locations When Possible </li></ul><ul><li>Develop A Segment Policy Instead Of A Per-Diem Policy </li></ul><ul><li>Negotiate Your Hotel Program In The Summer </li></ul><ul><li>Use Hotel RFP Software For Cities With Over 100 Room Nights </li></ul><ul><li>Negotiate One Primary & One Secondary Hotel Per City </li></ul><ul><li>Consolidate Spend </li></ul><ul><li>Consider Six Month Performance Agreements For Reluctant Properties </li></ul><ul><li>Pre-Negotiate New Locations </li></ul><ul><li>Ask That Most Add On Costs Are Included In The Rate </li></ul><ul><li>(Internet, Parking, Breakfast, Business Center, Gym, Etc.) </li></ul><ul><li>Play The Annual Shell Game – Shift Share </li></ul><ul><li>Look at Dynamic Pricing In Addition To Fixed Rates </li></ul>For Business Travel Services please call: 800-807-8018
  20. 20. Meals Traveler Meals Represent 9% Of Total Travel Spend Source: Runzheimer Average High Breakfast 14.43 17.23 Lunch 14.32 16.31 Dinner 31.21 37.46 3 Meal Total 60.16 71.00 Reduce Daily Meal Per-Diems To $60 Consider Not Reimbursing Alcohol Expenses Unless Entertaining Clients For Business Travel Services please call: 800-807-8018
  21. 21. Travel Policy & Communication Frequency of Communication to Travelers Source: BTN For Business Travel Services please call: 800-807-8018
  22. 22. Traveler Awareness of Preferred Suppliers Travel Policy & Communication Yes No Unsure Airlines 59% 37% 4% Hotels 64% 30% 6% Car Rental 66% 29% 6% Chauffeured Service 33% 55% 12% Corporate Credit Card 70% 25% 5% Travel Agency 65% 30% 5% Recommendation: Provide More Frequent Information To Travelers Source: BTN For Business Travel Services please call: 800-807-8018
  23. 23. Source: BTN Travel Policy & Communication Traveler Awareness of Company Policy* *Frequent Travelers 10+ Trips Annually For Business Travel Services please call: 800-807-8018
  24. 24. Source: BTN Travel Policy & Communication How Companies Address Policy Non-Compliance Exception Report to Supervisor 63% Non-Reimbursement 43% Exception Report to Traveler 36% Formal Reprimand 20% Other Actions 8% No Action 8% * Does Not Equal 100% Due To Multiple Answers For Business Travel Services please call: 800-807-8018
  25. 25. Source: BTN Travel Policy & Communication Travel Policy Changes In 2009 For Business Travel Services please call: 800-807-8018
  26. 26. Source: BTN Travel Policy & Communication How Companies Are Trimming Travel Costs 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% For Business Travel Services please call: 800-807-8018
  27. 27. Source: BTN Travel Technology Percentage Of Companies Currently Using The Following Technologies All Large* Respondents Companies Online Booking Tool 71% 96% Online Expense Reporting Tool 58% 92% Data Warehousing / Decision Support Tools 26% 52% Pre-Trip Reporting Tools 35% 50% *30million + In Annual Travel Spend For Business Travel Services please call: 800-807-8018
  28. 28. Source: BTN Travel Technology Travel Technology Use Today & In 2009 Personal Computing Use Will Use Laptop Computer 91% 5% Personal Digital Assistant 64% 15% Mobile Phone 92% 4% Videoconferencing 53% 27% For Business Travel Services please call: 800-807-8018
  29. 29. Source: BTN Travel Technology Travel Technology Use Today & In 2009 Airline Technology Use Will Use Onboard Laptop Power 52% 26% Airport Check-In Kiosk 80% 13% Electronic Seat Selection 78% 14% Automated Electronic Upgrades 60% 22% Car Rental Technology Satellite Navigation System 56% 22% Automated Toll Device 41% 24% For Business Travel Services please call: 800-807-8018
  30. 30. Source: BTN Travel Technology Use Today & In 2009 Travel Technology Hotel Technology Use Will Use Business Center Services 69% 14% In-Room High Speed Internet 83% 10% Automated Check In Kiosk 61% 18% Automated Check Out 76% 15% In-Room Voicemail 67% 13% Interactive Television 44% 21% For Business Travel Services please call: 800-807-8018
  31. 31. Source: BTN Travel Technology Use Today & In 2009 Travel Technology Information Technology Use Will Use Online Booking System 77% 10% Electronic Expense Reporting 62% 19% Corporate Internet Travel Page 49% 21% For Business Travel Services please call: 800-807-8018
  32. 32. Source: BTN Travel Leaders is offering a Complimentary 2009 Business Travel Analysis To speak with one of our Business Travel Consultants Click Here Offer expires December 21, 2008 For Business Travel Services please call: 800-807-8018
  33. 33. Let us focus on what WE do best, so you can focus on what YOU do best! Our comprehensive travel management programs give you an advantage like no other. Providing the perfect blend of vast resources and technology with personalized service and dedication We are your travel management department, MINUS the overhead. For Business Travel Services please call: 800-807-8018
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